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 januari 2021 will add a new and versatile legal instrument to the restructuring practice, at both the domestic and the international level. 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.