12.10.3 Possible points for improvement

Availability in suspension of payment and bankruptcy proceedings. The new plan procedure should also be available in suspension of payment and bankruptcy proceedings (surseance en faillissement).

Interim relief. The proponent of the plan should have the right to request interim relief, including a stay of individual enforcement action, independent of any stay of a bankruptcy filing.

Provisions for the continuation of executory contracts. There should be a provision that prevents valuable contracts from being terminated merely because a plan has been proposed or an insolvency event has occurred.

Termination of executory contracts. The proposed right to terminate contracts does deserve support, but it needs to be better thought through. It must be clear that, if the proponent of the plan unilaterally terminates a contract, the counterparty should be entitled to claim compensation for resulting damages. The claim must be capable of being restructured under the terms of the plan.

Employment contracts. It should be made clear that the exception for employment contracts only concerns an exception to the right to terminate contracts, but does not prevent a restructuring of liabilities arising from a regular termination of employment contracts on the basis of the termination rules that apply outside insolvency proceedings (e.g. liabilities under a regular severance plan).

The right of third parties to propose a plan. A creditor should have the right to propose a plan only after the court has established that the debtor is in a financial state of insolvency or pre-insolvency. A creditor who has the right to propose a plan must be granted full access to all information of the company necessary or desirable to propose a plan.

Early determinations. At the request of the proponent of the plan the court should be able to issue binding determinations at the earliest possible stage, and before any vote, on all points of dispute (including over valuation) that are relevant to the implementation of the proposed plan. The disadvantages of the current proposal are that the supervisory-judge can make determinations only on a limited number of topics, that other actors than the plan proponent can apply for early determinations (which could derail the process), and that the decision of the supervisory judge is not binding. A decision on the valuation is, by its very nature, too far-reaching and complex to leave to a single supervisory-judge, and requires additional safeguards.

Ability to skip a vote where it is not needed. At the request of the proponent of the plan, the court should, in particular, have the power to eliminate the rights of parties without the need for a vote, provided that it has been established that, on the basis of the determined valuation, the relevant parties no longer have an economic interest, that the elimination of their rights is necessary for the proposed restructuring, and that, without the proposedrestructuring, the debtor will become insolvent.

Criteria for the formation of classes. The provision on the formation of classes should be amended to provide that parties may be placed in the same class only if they i) have similar rights and ii) are afforded similar treatment under the plan.

No mandatory meetings. It should not be mandatory to hold meetings for the purpose of voting, or at all. It should be possible to cast votes outsideformal meetings, for example electronically.

Eliminating the head count. When it comes to voting, the requirement for a majority in terms of the number of creditors (head count) should be abolished.

No mandatory confirmation hearing for a plan that has been accepted, unless this is specifically requested. A plan that all classes have accepted should automatically become legally binding and effective within a certain period (one or two weeks) after notification has been given of the outcome of the vote without the need for a confirmation hearing, unless an interested party requests for a hearing within the period thus stipulated.

Timeliness of any complaints. Creditors should be obliged to bring any complaints to the attention of the proponent of the plan without undue delay, under penalty of the loss of the right to raise the complaint at a later stage.

General criteria for the confirmation of all plans. There should be only three criteria for the confirmation of a plan that all classes have accepted:

Additional criteria for the cram-down of dissenting classes. If one or more classes have rejected the plan, the court should be able to impose a plan over the objections of the dissenting classes only if the members of those classes have a choice under the terms of the plan between:

Rules for choosing between competing plans. The procedure should contain rules for choosing between competing plans. The supervisory judge should be able to set rules for coordinating the process of dealing with parallel plans.

A specialised insolvency court. All decisions in the context of pre-insolvency proceedings should be rendered by a specialised insolvency court.

No right of appeal. Decisions handed down by the court or the supervisory judge in the context of pre-insolvency proceedings should not be subject to appeal.