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The Legal Framework

The assessment of your WHOA eligibility is based on the statutory criteria from the Act on Court Confirmation of Extrajudicial Restructuring Plans (Art. 369-387 Dutch Bankruptcy Act) and the resulting case law:

• Art. 369 Fw — Scope of the WHOA — The WHOA is available to debtors who are in a situation where it is reasonably likely that they will be unable to continue paying their debts. The scheme is open to legal entities and natural persons with a business.
• Art. 370 Fw — Offering a composition — The debtor may offer a composition to its creditors and shareholders, with a class division in which rights are restructured. The composition may be a reorganisation plan or a liquidation plan.
• Art. 375 Fw — Court confirmation — The court tests the composition against strict requirements, including the best interest of creditors test: no creditor may be worse off than in bankruptcy.
• Art. 376 Fw — Cooling-off period — The court may order a cooling-off period during which enforcement measures are suspended. This gives the business breathing room to prepare the composition.
• Reorganisation value vs. liquidation value — Central is the question of whether the business is worth more as a going concern than in liquidation. This difference determines the scope for the compulsory composition.

The WHOA offers two routes: the reorganisation composition (continuation of the business) and the liquidation composition (controlled wind-down with a better outcome than bankruptcy). The compulsory composition can bind dissenting creditors, provided the statutory requirements are met.