Bankruptcy and restructuring

If you anticipate that your company will no longer be able to pay its debts, it is wise to seek advice in good time in order to examine whether your company can still be saved. If it turns out that your company can no longer be saved, thorough preparation can ensure that your liability as director will be limited. Even if your debtor is declared bankrupt, this does not necessarily mean that you will lose your money.

Some frequently asked questions about bankruptcy and restructuring

  • Creditors must be treated equally. Paying one creditor but not another is usually not allowed. However, sometimes there may be a good reason why a particular debt should still be paid.

  • Crowdfunding means you raise your funding from the public and don’t have to concern yourself with the conditions of a bank or other financial institution. Crowdfunding may seem ‘easy peasy’, but the reality is different. Raising capital from the public generally falls under the Dutch Financial Supervision Act (in Dutch: Wet op het financieel toezicht, Wft). To give an example: even the raising of money by a sports club from its members to build a new pitch is regarded as raising capital. The Wft and related regulations are exceptionally strict. Look before you leap.

  • There are a number of securities that are regularly used in financing a business. Common securities are mortgage rights on the business premises, pledges on shares/company inventory/stocks/trade receivables, joint and several liability, or a personal guarantee.

  • If your customer is bankrupt, you may still be able to rely on retention of title or the right of recovery in order to recover delivered goods. In addition, it is always worthwhile investigating whether there are other options to get your money back or limit further losses (e.g., by enforcing a right of pledge or invoking a right of retention).

  • Be aware that most financiers want to keep a grip on their financing as much as possible. That also means a grip on the borrower and their assets. For example, it is customary that you are not allowed to provide collateral to others or to drastically restructure your corporate structure without the financier’s permission.


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