I OVERVIEW OF RESTRUCTURING AND INSOLVENCY ACTIVITY

i Liquidity and the 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 2015 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 loose’ deals. Economic recovery and increased liquidity levels have, in some cases, resulted in stressed credits becoming bankable again.

Corporate borrowers are increasingly successful in diversifying their sources of funding. Apart from many corporate borrowers having access to funding under US private placements and German Schuldscheine, direct lending by alternative credit providers, in addition to foreign banks’ willingness to lend into the Dutch market, resulted in a borrower-friendly market.

For some others, however, the economic downturn lasted too long. It appears that a significant number of retail insolvencies in 2015 were, at least in part, the result of retailers being unable to meet short-term liquidity needs. Retailers that still needed a turnaround in 2015 found their banks, their suppliers and their landlords unwilling to enhance the liquidity position. In a broader sense, stress-testing and ECB supervision has driven banks into more thorough reviews of their own balance sheets. ‘Amend-and-pretend’ type strategies are increasingly being abandoned to monetise whatever a stressed credit may still be worth.

ii Impact of specific regional or global events

In consumer-facing sectors, fierce competition of low-budget competitors and online webshops, and short-term liquidity problems, resulted in insolvencies in the retail sector, followed by a degree of consolidation.

No significant insolvency activity has yet been triggered by the Brexit referendum in the UK. Concerns exist in the market as regards the future effectiveness of certain cross-border restructuring techniques upon the occurrence of the UK actually leaving EU.

iii Market trends in restructuring procedures and techniques

One concern in restructurings of consumer-facing businesses is the speed of implementation. Corporate rescue can sometimes only be successful if uninterrupted business can be guaranteed. In healthcare-related insolvencies, there is an added significant public policy element in continuation of business as usual.

To meet those requirements, pre-packaged insolvencies have taken centre stage in the Netherlands. A debtor, sponsor, their advisers and key creditors (notably secured lenders and key suppliers) prepare a deal, following which the court pre-appoints a liquidator to assess the proposed restructuring as a transaction that might be implemented on the first day of an actual bankruptcy. If approved, the debtor will file for bankruptcy and the person that was pre-appointed will, as liquidator, implement that proposed transaction by selling the relevant assets to a newly incorporated entity (or by facilitating a sale of the relevant assets by the secured lenders to that entity). As will be described below, the Dutch legislature is codifying this approach, which is currently based solely on court practice.

A further group of Dutch debtors relied on UK schemes of arrangements to adjust their financings in 2015.2 The use of UK schemes of arrangement – in certain cases, in combination with US Chapter 15 – more or less guarantees that schemes will be respected internationally because of the approach that US bankruptcy courts could take if creditors attempted to breach the orders imposed by the US bankruptcy courts. Scheme options may become less attractive in the wake of a possible Brexit and in the event that English courts are less inclined to assume jurisdiction.

Finally, 2015 saw a number of big insolvencies in the retail sector. Part of these resulted in liquidations during bankruptcy proceedings. Such liquidations often rely on liquidation sales organised by the liquidator in close cooperation with the secured creditor. In such cases, proceeds are turned over to the secured creditor subject to a marketing and cooperation fee payable to the liquidator. Other big insolvencies in the retail sector saw a controlled marketing process driven by the liquidator and a subsequent going-concern sale of viable business units.

iv Number of formal procedures entered into or exited during 2015

According to details made available by the Central Bureau of Statistics of the Netherlands (CBS), the total number of corporate bankruptcy proceedings commenced in 2015 amounts to 5,266 new cases (excluding sole proprietors or traders). This represents a decrease of over 20 per cent compared with the number of new filings in 2014, and is the lowest number in the last seven years. The decrease in the number of new bankruptcy cases is linked to the recovery of the Dutch economy in 2015.

Similar to 2014, most new bankruptcies have been recorded in the trade sector. A total number of 573 new cases were opened in the wholesale sector and 435 new cases in the retail sector. A significant number of bankruptcy proceedings were entered into in the financial services sector (938 new cases).

II GENERAL INTRODUCTION TO THE RESTRUCTURING AND INSOLVENCY LEGAL FRAMEWORK

i Available insolvency and restructuring procedures3

The Dutch 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.4 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.5 Furthermore, the Bank Recovery and Resolution Directive (BRRD)6 and the Single Resolution Mechanism Regulation (SRM Regulation)7 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). 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.ii, infra).

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).8 Pledges granted in advance over future property9 can no longer crystallise after the debtor’s divestment.10 During the course of bankruptcy proceedings, the liquidator is exclusively entitled to dispose of and administer the insolvent estate.11

The secured creditor in Dutch insolvency proceedings can enforce its rights as if the proceedings had not been opened.12 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.13 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.14 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.15 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.16

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.17 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.18 Director’s liability can also result from actions that resulted in default and non-recoverability of damages,19 as well as selective payments (e.g., non-payment to a particular creditor being based solely on unwillingness of the director to allow such payment to be made).20

Each director can also be held personally liable for the entire deficit of the bankrupt estate if their improper management caused the bankruptcy.21 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.22

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.23 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.24

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 pre-requires 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.25

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 pre-existing 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.26

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.27 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).28

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,29 or in the event of a concerted action by the debtor and the creditor aimed at facilitating preferential treatment of the latter (collusion).30

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.31 Bad faith is, notably, given when the creditor knew or should have known that the insolvency could reasonably be expected.32

III RECENT LEGAL DEVELOPMENTS

i Enforcement of security for future secured liabilities

In a previous edition of this chapter, it was stated that – according to prevailing opinion in legal literature and practice – a secured creditor is entitled to enforce security for future 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.33 This view has recently been endorsed by the Dutch Supreme Court in relation to surplus security arrangements.34 In essence, such arrangements rely on a secured party granting a guarantee to a third party (often an affiliate of the financier that provides specialist financing) for the performance of a payment obligation of a common debtor. In the event that the guarantee is invoked, the compensation claim of the guarantor or secured party can be enforced against any surplus value of the collateral encumbered by the debtor. The arrangement is valid and enforceable provided that the compensation claim of the guarantor or secured party falls within the description of the secured liabilities in the security documents, and the debtor is involved (e.g., by co-signing the surplus security arrangement or by executing an agreement with the guarantor). Even to the extent that the compensation claim originates during the insolvency of the debtor, such claim can be discharged from the enforcement proceeds of collateral.

ii Reasonable term for secured creditor to enforce security

As discussed in Section II.ii, infra, a liquidator is empowered to expedite enforcement of security by demanding the secured creditor to realise the collateral within a reasonable period of time.35 Failure to enforce the security within that time period will trigger a loss of enforcement rights and an obligation to share in the general realisation costs of the proceedings. In several recent cases, the Supreme Court has emphasised that expediting enforcement – or demanding exclusive control over collateral by the liquidator – may in exceptional cases amount to abuse of power.36 Whether the actions of the liquidator are of an abusive nature depends largely on an assessment of the competing interests of the secured creditor and the insolvent estate.

iii 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 after-acquired property (including future property that has been pledged or transferred in advance to a third party) belongs unencumbered to the insolvent estate.

In an important case of the Dutch Supreme Court, 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 pledged asset into an unconditional ownership right.37

iv Commingling of pledged property during insolvency proceedings

Upon the commingling of tangible moveable property owned by two separate parties, a distinction must be made between the following situations: one of the commingled assets can be considered to constitute the primary (main) asset; and none of the commingled assets can be deemed to be the primary asset. The former situation applies in the event that the value of the main asset significantly exceeds that of the other commingled assets or if the primary asset should be considered as such pursuant to the prevailing common opinion. In this case, the owner of the primary asset will be able to assert exclusive rights in respect of the commingled assets. Any property rights (e.g., security rights) in relation to the other commingled assets are lost.

In the event that no primary asset can be identified, the owners of the commingled property become co-owners in proportion to the value of their original assets. In a recent case of the Supreme Court, it was held that any property rights granted to third parties (e.g., security rights) on the original assets will be converted into equivalent property rights on the relevant share in the commingled, partly pledged and partly unencumbered, property. This also applies in the event that commingling occurs during the course of insolvency proceedings.38

v Credit transfers by the debtor settled after the commencement of insolvency proceedings

According to earlier case law of the Supreme Court, a liquidator can reclaim any credit transfers instructed by the debtor prior to its insolvency, provided that such credit transfers were not fully settled by the debtor’s account bank on the beginning of the day on which insolvency proceedings were opened.39 The Supreme Court has partially departed from this view and instead endorsed the opinion expressed in legal literature that any credit transfers can be reclaimed to the extent that they have not been credited on the account of the recipient creditor at 0.00 hours of the day on which the insolvency proceedings were opened.40

vi Set-off prior to commencement of insolvency proceedings

Set-off may be invoked by a counterparty – or triggered automatically by the underlying transaction documents – provided that all statutory and contractual requirements are met. However, certain limitations may apply in the event that the debtor is on the brink of insolvency.

For instance, a counterparty is not entitled to invoke set-off if his or her claim against or debt to the debtor is acquired at a time when he or she knew or reasonably should have known that the insolvency of the debtor was to be expected.41 Whereas the scope of this restriction has been generally interpreted broadly,42 it has been held in a recent case of the Supreme Court that the restriction does not apply to set-off invoked by a creditor who became indebted to its debtor as a result of a sale agreement executed with the debtor, pursuant to which, particular assets of the debtor are purchased by the creditor.43 Other remedies may be available in the event that such transaction caused prejudice to other creditors (e.g., clawback actions or claims based on general tort law).

IV SIGNIFICANT TRANSACTIONS, KEY DEVELOPMENTS AND MOST ACTIVE INDUSTRIES

As a summary, below is a selection of key insolvencies and restructurings of 2015, sorted by procedure used:

  • a liquidation in bankruptcy:

• Vroom & Dreesmann (V&D), retail;

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

• LaPlace, restaurant chain;

• Macintosh, retail;

• Perry Sport/Aktiesport, retail;

  • c share deal:

• Royal Imtech, technical services provider; and

  • d scheme of arrangement:

• Van Gansewinkel Groep, waste management business.

A significant transaction in the near future will likely include the sale by the Dutch State of Propertize BV (a bad bank created to unwind the property finance division of SNS REAAL).

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 European Insolvency Regulation (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 fall-back 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 general stay under the lex concursus of all assets comprised in the insolvent estate.
  • 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 Recast of the EU Insolvency Regulation

Regulation (EU) 2015/848 on insolvency proceedings has now been approved by the European Parliament and published in the Official Journal. It recasts and repeals the EIR. The new European Insolvency Regulation entered into force on 25 June 2015 but will only start to apply to insolvency proceedings commenced from 26 June 2017. Accordingly, the original EIR will continue to apply until then. A number of the provisions in the new EU Insolvency Regulation have different commencement dates.

The main changes to the EIR address:

  • a the need to extend its scope to include procedures under which a company’s debts are restructured at a pre-insolvency stage;
  • b a desire to resolve possible uncertainties that may be encountered when identifying where a company’s centre of main interests (COMI) is located, and to make it harder to move a company’s COMI from one jurisdiction to another;
  • c an identified need for greater cooperation and coordination when cross-border insolvencies involve groups of companies;
  • d problems caused by opening ‘secondary’ insolvency proceedings; and
  • e practical concerns surrounding publicising insolvency proceedings and lodging claims.
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 is 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 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 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).

Footnotes

1 Paul Kuipers is a partner at Linklaters LLP and head of the finance practice of the Amsterdam office.

2 See also in Section IVd, infra.

3 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.

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

5 See Part 3.5.5 of the Financial Supervision Act.

6 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.

7 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.

8 Article 23 of the Bankruptcy Code.

9 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.

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

11 Article 68 (1) of the Bankruptcy Code.

12 Article 57 (1) of the Bankruptcy Code.

13 Article 63a of the Bankruptcy Code.

14 Article 58 (1) of the Bankruptcy Code.

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

16 See also below in Section III.i, infra.

17 Article 6:162 of the Civil Code.

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

19 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).

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

21 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 Dutch Civil Code.

22 Article 2:10 of the Civil Code.

23 Article 2:9 (1) of the Civil Code and the proposed new article 2:9b of the Dutch Civil Code

24 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).

25 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).

26 Article 42 of the Bankruptcy Code.

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

28 Article 43 of the Bankruptcy Code.

29 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).

30 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).

3131 Article 54 (1) of the Bankruptcy Code.

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

33 See Article 132 (2) of the Bankruptcy Code and Article 483e of the Civil Procedure Code.

34 Cf. Supreme Court 16 October 2015, JOR 2016/20 (DLL/Van Logtestijn).

35 Article 58 of the Bankruptcy Code.

36 Cf. Supreme Court 16 January 2015, JOR 2015/308 (A/Van der Molen qq); Supreme Court 6 February 2015, JOR 2015/309 (Welage qq/Rabobank) and Supreme Court 14 August 2015, JOR 2015/252 (Glencore/NBM cs).

37 Cf. Supreme Court 3 June 2016, ECLI:NL:HR:2016:1046 (Rabobank/Reuser).

38 Cf. Supreme Court 14 August 2015, JOR 2015/252 (Glencore/NBM cs).

39 Cf. Supreme Court 31 March 1989, NJ 1990, 1 (Vis qq/NMB).

40 Cf. Supreme Court 20 March 2015, JOR 2015/251 (JPR Advocaten/Gunning qq).

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

42 For example, the obligation of an account bank to credit the balance of an account holder as a result of a credit transfer made by a third party, is deemed to constitute the ‘assumption of a debt’ for the purposes of article 54 of the Bankruptcy Code. Cf., e.g., Supreme Court 7 October 1988/, NJ 1989, 449 (AMRO/THB).

43 Cf. Supreme Court 10 July 2015, JOR 2015/282 (Wemaro/De Bok qq).

44 See Section VI.i, infra, on the Recast of the EIR.

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.