12.10.1 Short description

The Draft Bill of the Dutch Continuity of Enterprises Act II1 has been inspired by the American Chapter 11 and the English scheme of arrangement proceedings. It has also been drafted with the EC’s recommendation in mind.

The Draft Bill provides for the introduction of pre-insolvency proceedings that are available outside formal insolvency proceedings. There is no general moratorium, and the proceedings do not have to be given widespread publicity. Debtor and creditors alike have the right to propose a plan. The plan can bind all types of capital providers, including shareholders, preferential creditors and secured creditors. The proponent of the plan may restrict the plan to only a subset of the creditors. Creditors vote in classes. The plan is accepted if a majority within each class votes in favour of it. The court must then still confirm the plan and declare it generally binding. The court has the power to impose the plan over the objections of dissenting classes (cram-down). The procedure is generally flexible and appears efficient. With the exception of the possibility for appeal in two instances, court involvement is fairly limited.