Key features of the WHOA: the new Dutch pre-insolvency procedure
20 November 2020
On 6 October 2020, a bill for a new Dutch pre-insolvency procedure was enacted into law. Inspired by the scheme of arrangement in the UK Companies Act 2006 and Chapter 11 of Title 11 of the US Bankruptcy Code, the new Dutch Act on the Confirmation of Out-of-Court Restructuring Plans (Wet Homologatie Onderhands Akkoord) will enable debtors to propose a plan and restructure their debts outside of formal insolvency proceedings.Creditors, who may be placed in separate classes, will vote on the plan. If the plan is approved by at least one class of affected creditors, the plan may be confirmed by the court. During this process, the debtor will retain possession of its assets and can continue to conduct its business as usual. Aside from certain safeguards, the new Act does not prescribe what a plan should entail. The contents of the plan are largely left to the designs of the parties involved.
The Act will combine a fast and flexible framework for concluding pre-insolvency schemes with a high degree of deal certainty. It will enter into force on 1 January 2021.
More details on the Dutch Act on the Confirmation of Out-of-Court Restructuring Plans can be found here.