Knowledge platform for the Dutch CERP Act
The introduction of the Dutch Act on Confirmation of Extrajudicial Restructuring Plans ('CERP Act', in Dutch: Wet homologatie onderhands akkoord, or WHOA) on 1 January 2021 has added a new and versatile legal instrument to the restructuring arsenal, at both the domestic and the international level. It has drawn inspiration from the UK scheme and the US Chapter 11. The CERP Act sets out a procedure for companies to restructure their excessive debt by reaching a composition with their creditors and shareholders. Where previously a composition required the approval of all the creditors, and a single creditor could block the restructuring efforts, this changes with the CERP Act.
The CERP Act principally applies to companies that are at risk of becoming insolvent as a result of excessive debt, but still have some viable operations. However, the CERP Act can also be used for compositions to wind up companies that have no chance of surviving: in those situations, the CERP Act can be applied if winding up the operations through a non-insolvency composition will achieve a better outcome than if the operations are wound up in insolvency proceedings.
Our experts in Restructuring & Insolvency have set up a knowledge platform for the CERP Act, where they will publish blogs, legislative documents, articles and presentations to inform you of all the latest developments surrounding this new restructuring instrument.