The Lower Chamber of the Dutch Parliament voted in favour of the proposed Act on Confirmation of an Extrajudicial Restructuring Plan ("CERP"), commonly referred to as a 'Dutch scheme' or WHOA (after its Dutch name 'Wet Homologatie Onderhands Akkoord'), on Tuesday 26 May. The bill, which was earmarked by the Dutch government as urgent in view of the impact of COVID-19 on many businesses, will now be sent to the Upper Chamber of Parliament for its vote. The government aims to have the bill enter into force by 1 July 2020.
CERP makes it possible to restructure a company's debts outside of insolvency proceedings. It allows for division of creditors into classes and for cross-class cramdowns. It is intended to be a flexible tool for companies in financial distress situations, and can be deployed in purely financial as well as fully operational restructurings. The debtor, who remains in possession throughout the process, or a restructuring officer appointed at the request of his creditors, can offer a plan to some or all of the company's creditors. A plan under CERP can affect the rights of any type of creditor, including shareholders and secured creditors. However, rights arising out of employment agreements shall remain unaffected under the plan.
Members of NautaDutilh's Restructuring & Insolvency team have been involved in the legislative process leading to CERP since the first draft proposal, and have been studying the Act and its potential in detail. We are happy to answer any questions you may have on the subject, and are ready to assist companies and their stakeholders in addressing distress situations with CERP or other tools.