I OVERVIEW OF RESTRUCTURING AND INSOLVENCY ACTIVITY

i Liquidity and state of the financial markets

Quantitative easing by the European Central Bank and others has resulted in high liquidity levels and low funding costs for Dutch borrowers. Dutch corporates have also had good access to financing throughout 2016 because foreign financiers and investors have been showing an increasing appetite for Dutch assets. Notably, in the real-estate market, German Pfandbrief banks are becoming lenders of choice, while in the market for leveraged financing, the prime sponsors can dictate the terms of their ‘covenant lite' deals. Economic recovery and increased liquidity levels have, in some cases, resulted in stressed credits becoming bankable again. For corporate borrowers, 2016 was mainly a year to pursue repricings of older loans. Volumes for acquisition financing were lower, despite an upturn in the acquisitions themselves. Strategic purchasers could often fund the acquisition price out of their own funds, with a bridge facility being merely sought as a tool to present certainty of funding.

ii Impact of specific regional or global events

The political shocks of the Brexit referendum and the election of Donald Trump as US president, including the uncertainty in the lead-up to the referendum and the US elections, resulted in a reduction in M&A activity that was reflected in the financing market. However, the Brexit referendum also resulted in increased activity in the Dutch real-estate market, with a number of international investors choosing to invest in the Netherlands partially as a result of uncertainty about the prospects for UK real estate and sterling.

In consumer-facing sectors, fierce competition of low-budget competitors and online shops, and short-term liquidity problems, continues to drive changes in the retail sector.

iii Market trends in restructuring procedures and techniques employed during this period

Pre-packaged insolvencies (pre-packs) remain an area of focus in the Netherlands. In order to ensure continuity of a stressed business, a debtor, sponsor, their advisers and key creditors (notably secured lenders and key suppliers) prepare a deal, following which the court appoints a liquidator to assess the proposed restructuring as a transaction that might be implemented on the first day of an actual bankruptcy. While the Dutch legislator continues to work on a broader statutory platform for pre-packs (see Section VI.ii, infra), employee rights have taken centre stage with arguments having been raised that a pre-pack constitutes a transfer of undertaking that is not exempt from protections of the workforce (known as TUPE rules, under which employees effectively transfer to the transferee business). Following the recent judgment of the European Court of Justice (ECJ) concerning the Estro pre-pack (see Section VI.ii, infra), pre-packs can no longer be used as a tool to make part of the workforce redundant, at least not without making severance payments. It has now also been clarified that, if a company that is trying to restructure via insolvency has a works council, that works council, in principle, has advisory rights in respect of the restructuring.

Finally, 2015 saw a number of big insolvencies in the retail sector that resulted in the courts giving important practical guidance in the course of 2016 regarding the position of suppliers that retained their title and creditors having security over stock. During a (retail) insolvency, there is the option to ask for a stay of enforcement for a period of up to four months. During that period, the retail operation can be kept a going concern, even where that includes selling stock supplied under retention of title or pledged in favour of secured creditors. The insolvency administrator will subsequently need to account to the supplier or secured creditor for the value of the assets so sold. That turnover will, however, not necessarily be at retail prices and attention will be paid to the costs of the estate in selling for the benefit of others and what would otherwise have been recoverable in a more classic enforcement sale.

In retail insolvencies, one enforcement method that is regularly used includes a liquidation sale conducted by the liquidator under a mandate granted by the secured creditor. Any cash and electronic payments made by customers in respect of encumbered property are deemed to constitute enforcement proceeds available for distribution to the secured creditor.

iv Number of formal procedures entered into or exited during 2016

According to details made available by the Central Bureau of Statistics of the Netherlands (CBS), the total number of corporate bankruptcy proceedings commenced in 2016 amounts to 4,396 new cases (excluding sole proprietors and traders). This represents a decrease of almost 17 per cent compared with the number of new filings in 2015, and is the lowest number since 2009. The decrease in the number of new bankruptcy cases is linked to the recovery of the Dutch economy in 2016.

Similar to 2015, most new bankruptcies have been recorded in the wholesale and retail sector. A total number of 449 new cases were opened in the wholesale sector and 425 new cases in the retail sector. A significant number of bankruptcy proceedings were entered into in the financial services sector (758 new cases). The sharpest drop in new bankruptcy cases concerned the construction industry (a reduction of 33 per cent in new cases).

II GENERAL INTRODUCTION TO THE RESTRUCTURING AND INSOLVENCY LEGAL FRAMEWORK

i Available insolvency and restructuring procedures2

The Bankruptcy Code provides for three main proceedings: bankruptcy, suspension of payments and debt adjustment for natural persons.

Bankruptcy proceedings have been primarily designed as liquidation proceedings, but in practice, can function as a restructuring tool (e.g., through a composition scheme or by means of a going-concern sale of the debtor's viable business parts). The primary objective of suspension of payments proceedings is the reorganisation and continuation of the debtor's business, but the limited scope of the proceedings (confined to unsecured, non-preferential, insolvency claims) and continued application of transfer of undertaking protection rules render it ineffective for many restructurings.3 The main purpose of debt adjustment for natural persons is to provide heavily indebted natural persons with a fresh start. Considering the focus of this chapter on large corporate debtors, debt adjustment for natural persons will not be further dealt with.

Special emergency proceedings for financial undertakings have been enacted in the Financial Supervision Act. Such proceedings contain elements of both liquidation and restructuring proceedings.4 Furthermore, the Bank Recovery and Resolution Directive (the BRRD)5 and the Single Resolution Mechanism Regulation (the SRM Regulation)6 provide for a European approach towards the recovery and resolution of banks and large investment firms (and certain affiliated entities) in distress. To facilitate a timely intervention in respect of such institutions, national legislation implementing the BRRD and the SRM Regulation grants certain intervention powers to competent resolution authorities. Beyond the scope of the BRRD and the SRM Regulation, the Dutch Central Bank has powers to procure that a bank in serious financial problems is transferred, in whole or in part, to a third party. Furthermore, the Dutch Minister of Finance holds powers to intervene in the affairs of banks, investment firms and (managers and custodians of) investment institutions (all as defined in the Financial Supervision Act), including the power to expropriate their shares or capital instruments and some or all of their assets (e.g., as applied to the nationalisation of SNS REAAL NV and SNS Bank NV in February 2013), where this is necessary to safeguard the stability of the Dutch financial system.

Restructurings often occur beyond the setting of formal insolvency proceedings (e.g., through security enforcement, new or amended financing arrangements, contractual composition schemes or foreign restructuring routes). The main disadvantages of such informal restructurings often include the lack of a stay on individual recourse rights of creditors and the absence of a cramdown mechanism in relation to dissenting and non-participating creditors, beyond those mechanisms agreed between creditors. Changes to the statutory framework are pending to enhance attempts to restructure financially distressed companies outside formal insolvency proceedings (see further in Section VI, supra).

ii The taking and enforcement of security

Loans granted to a corporate debtor can be secured over the company's assets. Creation requirements of security rights are governed by general rules of property law and depend on the relevant type of collateral. All-embracing security can be obtained by a combination of pledges and mortgages over assets comprising the debtor's business.

An important effect of the commencement of bankruptcy proceedings is the divestment of the debtor (i.e., the debtor loses the power to dispose of and administer the assets included in the insolvent estate).7 Pledges granted in advance over future property8 can no longer crystallise after the debtor's divestment.9 During the course of bankruptcy proceedings, the liquidator is exclusively entitled to dispose of and administer the insolvent estate.10

The secured creditor in Dutch insolvency proceedings can enforce its rights as if the proceedings had not been opened.11 Enforcement of security can only be temporarily stayed by the order of a moratorium at the time of the bankruptcy adjudication or subsequently by the supervisory judge.12 Such a moratorium can last for a maximum period of four months (including extensions). The liquidator has powers to expedite enforcement of security by demanding that the secured creditor realise the collateral within a reasonable period of time.13 Failure to enforce within that time period will result in a loss of enforcement rights and an obligation to share in the general realisation costs of the proceedings.14 A final limitation on the position of the secured creditor is that it cannot enforce its security in respect of all claims that might arise after the opening of insolvency proceedings.15

In practice, the secured creditor and the liquidator often agree on the realisation of the secured asset by the latter against the deduction of a nominal fee from the realisation proceeds.

iii Duties of directors of companies in financial difficulties

No statutory obligation exists for directors of a financially distressed company to file for insolvency proceedings. Nevertheless, governance of the company may be placed under increased scrutiny by third parties and continued trading may give rise to director's liability.

In essence, directors would face liability if their behaviour was negligent towards a third party and constituted serious personal wrongdoing.16 A prominent ground for personal liability is when directors allowed the debtor to carry out a transaction with a third party while they knew (or should have known) that the debtor would be unable to meet its obligations under that transaction and that the deprived counterparty would not have sufficient recourse for its damages.17 Director's liability can also result from actions that resulted in default and non-recoverability of damages,18 as well as selective payments (e.g., non-payment to a particular creditor based solely on unwillingness of the director to allow such payment to be made).19

Each director can also be held personally liable for the entire deficit of the bankrupt estate if their improper management caused the bankruptcy.20 By statute, improper management is established if books and records of the bankrupt company have not been properly maintained or if directors failed to meet obligations regarding the company's annual accounts. Subject to proof to the contrary, that improper management is also assumed to have caused the bankruptcy.21

Directors can also be held liable by the company for improper performance of management tasks allocated to them by law or the articles of association.22 Examples of circumstances in which directors can be held liable include violation of the law or articles of association, procuring reckless and irresponsible financial behaviour of the company and utilising assets of the company for personal benefit.23

iv Clawback actions

During bankruptcy proceedings, a liquidator may invoke the actio Pauliana in order to invalidate antecedent transactions that are detrimental to the insolvent estate. Clawback generally prerequires prejudice, which will materialise in the event creditors receive a lower distribution on their claims as a result of a transaction.

Prejudice would typically be the result of a reduction in the total value of the debtor's estate as a result of a transaction (transactions at undervalue) or as a result of a disturbance of the statutory waterfall of priorities when a company is already insolvent (preferences). The liquidator should look at the entire transaction (including beneficial aspects of the transaction) and, therefore, has no right to cherry-pick by only looking at one particular provision of a document as a clause that has a negative impact on the recourse position of the joint creditors. If the disputed act was part of a set of transactions, the positive or negative effects of the combined set should be regarded as well.24

Where prejudice has been established, the right to challenge the prejudicial action depends on further circumstances. The avoidance of an act entered into without a preexisting obligation to perform the relevant act requires that the debtor (and in the case of a transaction against consideration, also the counterparty) knew or should reasonably have known that such prejudice would materialise.25

Knowledge of a mere chance that prejudice may occur is insufficient to invoke the actio Pauliana. Knowledge must relate to a reasonable degree of likeliness that insolvency proceedings will be opened and that the insolvent estate contains a deficit.26 In certain cases, the onus of proof regarding knowledge of prejudice is reversed by law (e.g., in the event of certain transactions executed between related parties within a period of one year prior to the bankruptcy date).27

A compulsory or involuntary legal act, on the other hand, can only be avoided either in the event that the transaction occurred at a time on which the counterparty knew or ought to have known that a petition was submitted for the commencement of insolvency proceedings against the debtor,28 or in the event of a concerted action by the debtor and the creditor aimed at facilitating preferential treatment of the latter (collusion).29

Finally, it should be noted that set-off effected in the period immediately prior to the commencement of insolvency proceedings could be clawed back if the creditor effecting the set-off acted in bad faith when acquiring its claim or debt on which it relied when setting off.30 Bad faith is, notably, given when the creditor knew or should have known that the insolvency could reasonably be expected.31

III RECENT LEGAL DEVELOPMENTS

i Conditional ownership as eligible collateral

As described above, an important effect of the commencement of insolvency proceedings concerns the divestment of the debtor (see Section II.ii, supra). Any property acquired by the debtor after the commencement of the proceedings (including future property that has been pledged or transferred in advance to a third party) belongs unencumbered to the insolvent estate.

In an important Supreme Court case, it has been held that assets supplied under a retention of title arrangement constitute immediate (albeit conditional) ownership rights in favour of both the supplier and the buyer: an ownership right under a condition subsequent of payment of the purchase price of the former and ownership under a condition precedent of payment of the purchase price of the latter. Both conditional ownership rights can be immediately transferred or encumbered for the benefit of a third party. For example, in the event that a buyer grants a pledge over its conditional ownership of supplied property under a retention of title arrangement, the pledgee acquires an immediate right of pledge on such conditional ownership rights. This right remains unaffected in the event that insolvency proceedings are opened against the supplier. Moreover, the payment of the purchase price during such insolvency proceedings converts the proprietary entitlement of the buyer of the pledged asset into an unconditional ownership right.32

ii Illegitimate frustration of right of pledge by liquidator

In the event that a liquidator illegitimately collects a pledged claim,33 the claim - and correspondingly the right of pledge - ceases to exist. The (former) pledgee can claim the remittance of the collected amount as a claim against the estate and invoke priority similar to that which was awarded to its frustrated right of pledge. However, in case the insolvent estate comprises insufficient funds to discharge all claims against the estate in full, the salary of the liquidator is awarded senior ranking over the claim of the (former) pledgee. This rule follows from recent (controversial) case law of the Supreme Court.34 The frustration of the right of pledge may trigger the personal liability of the liquidator against the (former) pledgee.35

iii Ranking of secured post-commencement claims with regard to unsecured (preferential) insolvency claims

It has been established in case law that a secured creditor is entitled to enforce security for post-commencement secured liabilities, provided that such liabilities originate out of a legal relationship already existing at the time at which the bankruptcy proceedings have been opened.36 This rule also applies to post-commencement claims, which are awarded the status of claims against the estate pursuant to an express statutory provision. Claims against the estate (including those secured by a pre-commencement right of pledge) must be discharged in full before a distribution can be made to the holder of any unsecured insolvency claim (including preferential insolvency claims).37

iv Status of post-commencement interest claims

In a landmark Supreme Court decision it was held that (in principle) post-commencement claims which originate from a pre-commencement legal relationship are admissible in the proceedings as insolvency claims.38 An exception to this rule is provided for by law which renders (unsecured) post-commencement interest claims inadmissible in the proceedings.39 A recent case confirms that the duration of the insolvency proceedings should be ignored concerning the timing of a possible future prescription of such interest claims.40

v Opening of debtor's books and records

During insolvency proceedings, creditors can request the opening of the debtor's books and records if they have a direct and sufficiently significant interest.41 In this respect it must be demonstrated by the relevant creditor that information is needed to determine its relationship with the debtor (e.g., regarding the amount, nature or substance of its claim). No such opening of the books and records can be demanded to examine possibilities to initiate legal action against third parties (e.g., (former) directors of an insolvent debtor company).42 Access to the debtor's books and records should be distinguished from the opening of the books and records of the liquidator concerning the administration of the insolvent estate (as addressed in earlier case law).43

IV SIGNIFICANT TRANSACTIONS, KEY DEVELOPMENTS AND MOST ACTIVE INDUSTRIES

As a summary, below is a selection of key insolvencies and restructurings carried out in 2016, sorted by procedure used:

    • a liquidation in bankruptcy:

• Vroom & Dreesmann (V&D), retail;

  • b (partial) going-concern sale in bankruptcy:

• Macintosh, retail (including its Scapino, Dolcis and Manfield brands);

• McGregor, retail;

• MS Mode, retail;

• Unlimited Sports Group, retail;

  • c share deal:

• Propertize B.V., a nationalised Dutch bad bank sold to NPL investors; and

  • d scheme of arrangement:

• Metinvest B.V., a Dutch finance vehicle in an Ukrainian based iron ore and steel conglomerate.

• Indah Kiat International Finance Company B.V., a Dutch finance vehicle related to the APP Group, which is primarily engaged in manufacturing paper pulp.

V INTERNATIONAL

i General cross-border insolvency framework

The general legal framework pertaining to cross-border insolvency proceedings is primarily of European origin. Dutch courts recognise foreign insolvency proceedings that fall within the ambit of the Recast European Insolvency Regulation (Recast EIR)44 and the Winding-Up Directives concerning credit institutions and insurance undertakings.45 To date, the Netherlands has not adopted the UNCITRAL Model Law on Cross-Border Insolvency.

In the absence of binding international rules on recognition of foreign insolvency proceedings, other than the said EU law instruments, the fallback position under Dutch law is based on case law only. Under that case law, foreign proceedings outside of the scope of EU law instruments are merely granted territorial effect in the following ways:

  • a Assets of a debtor that are situated in the Netherlands are excluded from the scope of a general attachment and a general stay under the lex concursus.
  • b Any legal effects of the commencement of insolvency proceedings applicable under the lex concursus cannot be invoked in the Netherlands to the extent that this would prevent the debtor's creditors from taking recourse against assets situated in the Netherlands during or upon the conclusion of the proceedings.
  • c The application of the territoriality principle does not prevent any other legal effects from being invoked in the Netherlands. For example, a liquidator is entitled to administer and dispose of the debtor's assets situated in the Netherlands, provided that such rights are conferred to him under the lex concursus and any attachments levied by an execution creditor prior to such acts by the liquidator are respected.46
ii Recognition of UK schemes of arrangement

Dutch companies have increasingly been using English law-governed schemes of arrangement as a means of implementing debt restructurings. The first case involving a Dutch company in which recognition issues have been considered is Re NEF Telecom Company BV.47 Another example entails the scheme offered by Magyar Telecom, which was a Dutch borrower.48 More recent examples are mentioned in Section IV,(d), supra.

The prevailing view in legal literature and practice is that Dutch courts will probably recognise an English court order. There is guidance that a scheme of arrangement is within the scope of the Brussels I bis Regulation,49 so that the Dutch court is generally not entitled to dispute the English court's jurisdiction and could refuse recognition of the scheme.

Should schemes of arrangement be outside the scope of the Brussels I bis Regulation, then alternative grounds for recognition have been identified, including:

  • a the Rome I Regulation;50
  • b the Convention providing for the Reciprocal Recognition and Enforcement of Judgments in Civil Matters (concluded on a bilateral basis between the Netherlands and the United Kingdom on 17 November 1967); and
  • c general Dutch private international law.

VI FUTURE DEVELOPMENTS

i Proposal for EU Insolvency Directive

On Tuesday, the European Commission issued a proposal for a Directive on ‘preventive restructuring frameworks, second chance and measures to increase the efficiency of restructuring, insolvency and discharge procedures' (the Directive). If implemented, it would significantly close the gap between Member States' existing restructuring and insolvency frameworks, placing a greater emphasis on corporate rescue and significantly reducing the ability of shareholders and ‘out of the money' creditors to block a viable restructuring proposal.

The Directive does not attempt to harmonise core aspects of formal insolvency procedures such as the conditions for opening insolvency proceedings, definitions of insolvency or the ranking of claims. This is unsurprising, as deciding, for example, which creditor claims should be prioritised depends on balancing a range of cultural, economic, social and political considerations, with the final balance struck varying considerably between jurisdictions. Instead, the Directive focuses, as far as corporate debtors are concerned, on ensuring that a statutory framework is put in place in each Member State that maximises the chances of a company with a viable business being able to restructure its debts before it is forced into liquidation. The five main elements of the European proposals, which would not be available to credit institutions or insurance undertakings, relate to: (1) the framework for a restructuring plan; (2) the cramdown of ‘out of the money' creditors; (3) limitation of shareholder leverage; (4) the availability of a preventative restructuring procedure; and (5) the protection for new financing, interim financing and other restructuring-related transactions.

ii Future reform of Dutch law

It is currently clear that no full revision of the statutory regime will occur in the foreseeable future. Various proposals are currently pending or being prepared to improve specific parts of the current regime. Main themes of reform include:

  • a combating insolvency fraud through the introduction of director disqualification rules, revision of criminal law aspects of insolvency proceedings and other powers;
  • b the promotion of corporate rescue through the Business Continuity Acts described below; and
  • c the modernisation of insolvency proceedings by enhancing electronic communication modes, abolishing physical claims admission meetings, adding flexibility in the composition of the creditors' committee and other tools.

Specific attention should be drawn to the proposed Business Continuity Acts, which are expected to be enacted in three tranches, numbered I to III. These Acts purport to promote the rescue of financially distressed companies at an early stage.

A proposed amendment of the current regime under the Business Continuity Act I includes the debtor's right to request a court appointment of a silent administrator prior to the commencement of formal insolvency proceedings. The silent administrator will, in principle, be appointed as liquidator in subsequent formal insolvency proceedings. The silent administrator can declare:

  • a that it can be reasonably expected that certain pre-commencement transactions to be conducted in the ordinary course of business or to discharge outstanding liabilities will not be avoided by the liquidator pursuant to the Dutch clawback rules in subsequent insolvency proceedings;
  • b the circumstances under which it can be reasonably expected that the liquidator will sell goods after the commencement of bankruptcy proceedings; and
  • c the preparations that can be made in order to accelerate the administration of possible bankruptcy proceedings.

The future of the Business Continuity Act I is somewhat uncertain in the wake of the recent ECJ judgment concerning the Estro pre-pack. In essence, the ECJ ruled that TUPE rules (see above Section I.iii, infra) apply to pre-packaged going concern sales implemented upon (or soon after) the commencement of bankruptcy proceedings. Although bankruptcy proceedings are designed by the legislator as winding-up proceedings and generally benefit from a statutory liquidation carve out from the TUPE rules, a pre-pack aimed at ensuring the continuation of the debtor's business cannot be considered to be a liquidation for the purposes of such carve out (regardless of whether the pre-pack is technically implemented during bankruptcy proceedings). Employment contracts and accrued liabilities will thus automatically transfer to the transferee of the debtor's business. Where many of the companies that used Dutch pre-packs had done so as a tool to reduce (the costs associated with) their workforce, without having to make severance payments, this incentive for a pre-pack has now been effectively blocked by the ECJ. A pre-pack could still be useful to, for example, restructure other liabilities of a financially distressed debtor or to procure a going concern sale of viable parts of the debtor's business, but the ECJ ruling may cause the tool to be reconsidered in its entirety.

The Business Continuity Act II purports to introduce a statutory regime governing composition plans outside formal insolvency proceedings. The proposed regime provides for cramdown in relation to creditors and shareholders dissenting to a debt restructuring supported by a majority of creditors and shareholders in the relevant class of creditors. A composition plan can be offered to individual classes.

Among the measures currently contemplated for the Business Continuity Act III is the introduction of a prohibition on ipso facto clauses in contracts that provide for the supply of essential goods and services.

Other measures currently considered to enhance the speed and efficiency and to reduce the costs of insolvency proceedings include:

  • a enhanced possibilities to use digital and electronic communication means (e.g., to conduct creditor meetings and to circulate information);
  • b measures to accelerate the proceedings (e.g., introduction of a bar date for the admission of claims);
  • c tailored solutions for complex proceedings (e.g., the proactive admission of claims in case of insolvency proceedings opened against an issuer of complex financial products traded on the international capital markets); and
  • d enhanced insolvency expertise of the legislator and judiciary (e.g., by the appointment of an Insolvency Council as a new advisory body).

1 Paul Kuipers is a partner at Linklaters LLP.

2 See further on available insolvency and restructuring procedures: Dennis Faber and Niels Vermunt, ‘National Report for the Netherlands', in Dennis Faber et al. (eds), Commencement of Insolvency Proceedings, Oxford International and Comparative Insolvency Law Series, Volume 1, Oxford University Press 2012, page 428 ff.

3 Article 232 of the Bankruptcy Code, Article 7:663 and Article 7:666 of the Civil Code.

4 See Part 3.5.5 of the Financial Supervision Act.

5 Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No. 1093/2010 and (EU) No. 648/2012, of the European Parliament and of the Council.

6 Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014 establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No. 1093/2010.

7 Article 23 of the Bankruptcy Code.

8 Mortgages cannot be granted in advance over future immoveable assets, registered ships and registered aircraft. See Article 3:97 (1) and 3:98 of the Civil Code.

9 Article 23 and 35 (2) of the Bankruptcy Code.

10 Article 68 (1) of the Bankruptcy Code.

11 Article 57 (1) of the Bankruptcy Code.

12 Article 63a of the Bankruptcy Code.

13 Article 58 (1) of the Bankruptcy Code.

14 Article 58 (1) and Article 182 of the Bankruptcy Code.

15 It follows from Article 132 (2) of the Bankruptcy Code and Article 483e of the Civil Procedure Code that security can only be enforced during insolvency proceedings for (i) pre-commencement secured claims; and (ii) post-commencement secured claims which originate from a pre-commencement legal relationship. Cf. also Supreme Court 16 October 2015, JOR 2016/20 (DLL/Van Logtestijn).

16 Article 6:162 of the Civil Code.

17 Supreme Court 6 October 1989, NJ 1990, 286 (Beklamel).

18 Supreme Court 18 February 2000, JOR 2000/56; NJ 2000, 295 (New Holland Belgium/Oosterhof) and Supreme Court 8 December 2006, JOR 2007/38; NJ 2006, 659 (Ontvanger/Roelofsen).

19 For example, Supreme Court 26 March 2010, JOR 2010/127; NJ 2010, 189 (Zandvliet/ING).

20 Article 2:138 (1) and Article 2:248 (1) of the Civil Code. Such improper management must have occurred within three years of the commencement of the bankruptcy proceedings. See Article 2:138 (6) and Article 2:248 (6) of the Bankruptcy Code. The scope of the provision is extended to shadow directors pursuant to Article 2:138 (7) and Article 2:248 (7) of the Civil Code. A new Bill on management and supervision of legal entities seeks to apply similar rules regarding all corporate entities by implementing Article 2:9c in the Civil Code.

21 Article 2:10 of the Civil Code.

22 Article 2:9 (1) of the Civil Code and the proposed new Article 2:9b of the Civil Code.

23 Other circumstances that may be relevant include the nature of the company's activities and corresponding risks, the allocation of tasks within the board of directors, possible guidelines applicable to management, the information available to directors at the time of scrutinised actions and decisions, and the knowledge and prudence which may generally be expected of a director which is sufficiently prepared and performs his task in a diligent manner. See Supreme Court 10 January 1997, JOR 1997/29; NJ 1997, 360 (Staleman/Van de Ven).

24 Supreme Court 10 December 1976, NJ 1977, 617 (Eneca) and Supreme Court 8 July 2005, JOR 2005/230; NJ 2005, 457 (Van Dooren qq/ABN AMRO Bank II).

25 Article 42 of the Bankruptcy Code.

26 Cf. Supreme Court 22 December 2009, JOR 2011/19; NJ 2010, 273 (ABN Amro Bank/Van Dooren qq III).

27 Article 43 of the Bankruptcy Code.

28 Knowledge of the mere likelihood that insolvency proceedings may be opened is insufficient to meet this requirement. See Supreme Court 16 June 2000, NJ 2000, 578 (Van Dooren qq/ABN AMRO Bank I).

29 Supreme Court 24 March 1995, NJ 1995, 628 (Gispen qq/IFN) and Supreme Court 20 November 1998, JOR 1999/19; NJ 1999, 611 (Verkerk/Tiethoff qq).

30 Article 54 (1) of the Bankruptcy Code.

31 Supreme Court 7 October 1988, NJ 1989, 449 (AMRO/THB).

32 Cf. Supreme Court 3 June 2016, JOR 2016/287 (Rabobank/Reuser).

33 For example, the liquidator is not entitled to actively pursue the collection of pledged claims during a reasonable time period (generally two weeks). This rule is endorsed in Supreme Court 22 June 2006, NJ 2007, 520 (ING/Verdonk qq) and enables the pledgee to notify account debtors of the pledged claim. Upon such notification, the pledgee is exclusively entitled to collect the claim pursuant to Article 3:246 (1) of the Civil Code and Article 57 (1) of the Bankruptcy Code.

34 Supreme Court 30 October 2009, JOR 2009/341 (Hamm qq/ABN AMRO) and Supreme Court 5 February 2016, JOR 2016/83 (Rabobank/Verdonk qq).

35 Cf. e.g., Supreme Court 19 April 1996, NJ 1996, 727 (Maclou) and Supreme Court 16 December 2011, NJ 2012, 515 (Prakke/Gips).

36 See Supreme Court 16 October 2015, JOR 2016/20 (DLL/Van Logtestijn). This view is based on Article 132 (2) of the Bankruptcy Code and Article 483e of the Civil Procedure Code.

37 Cf. 15 April 2016, JOR 2016/215 (Van der Maas qq/Heineken).

38 Supreme Court 19 March 2013, JOR 2013/224 (Koot/Tideman).

39 Article 128 of the Bankruptcy Code.

40 Supreme Court 24 June 2016, JOR 2016/290 (BSM/Van Galen qq).

41 Article 3:15j (d) of the Civil Code.

42 Supreme Court 8 April 2016, JOR 2016/180 (Schmitz qq/Aerts Europa).

43 See Supreme Court 21 January 2005, NJ 2005, 249 and NJ 2005, 250 (Jomed I and II). The opening of the books and records of the liquidator is governed by art. 69 and 76 of the Bankruptcy Code.

44 Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings.

45 Council Regulation (EC) No. 1346/2000 of 29 May 2000 on insolvency proceedings, OJ 2000, L160/1, Directive 2001/17/EC of the European Parliament and of the Council of 19 March 2001 on the reorganisation and winding up of insurance undertakings, OJ 2001, L110/28 and Directive 2001/24/EC of the European Parliament and of the Council of 4 April 2001 on the reorganisation and winding-up of credit institutions, OJ 2001, L125/15.

46 See Supreme Court 2 June 1967, NJ 1968, 16 (Hiret/Chiotakis); Supreme Court 31 May 1996, JOR 1996/75; NJ 1998, 108 (Coppoolse/De Vleeschmeesters); Supreme Court 24 October 1997, JOR 1997/146; NJ 1999, 316 (Gustafsen qq/Mosk); Supreme Court 19 December 2008, JOR 2009/94; NJ 2009, 456 (Yukos I) and Supreme Court 13 September 2013, JOR 2014/50; NJ 2012, 424 (Yukos IV).

47 [2012] EWHC 2944 (Comm); recognition issues do not appear to have been raised in a prior case of a Dutch company proposing a scheme, Re DAP Holding NV [2005] EWHC 2092 (Ch).

48 Re Magyar Telecom [2013] 3800 (Ch).

49 Regulation (EU) No. 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, OJ 2012, L 351/1.

50 Regulation (EC) No. 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations, OJ 2008, L177/6.