What options exist to restructure a Dutch company that is close to insolvency, and how does a formal rescue procedure work?

When a Dutch company starts experiencing serious financial distress, there are essentially two restructuring routes to avoid bankruptcy: an informal out-of-court restructuring or a formal rescue procedure. In an early stage, management may try to renegotiate terms with creditors such as payment deferrals, partial debt write-offs, or refinancing. This approach is fast and flexible, but it only works if all key creditors cooperate; a single hold-out can block the solution.

If consensus cannot be reached and bankruptcy is likely, Dutch law offers a rescue mechanism under the Wet homologatie onderhands akkoord (WHOA). Under the WHOA, the company and in some cases a creditor or shareholder can propose a restructuring plan to its creditors, who vote in classes. If creditors representing at least two-thirds of the value in a class approve, the court can confirm the plan and make it binding on all creditors, including those who voted against it. During the process, the court may grant a temporary stay of enforcement actions to give the company breathing space. The entire procedure typically takes a few months.

Although not legally mandatory, it is in practice highly advisable to engage a restructuring adviser and a lawyer. The WHOA involves strict procedural rules, complex valuation issues, and detailed court filings. Without professional support, the risk that the court refuses to confirm the restructuring plan is significant. Forsyte Advocaten.