Court confirmation of extrajudicial restructuring plans | Wet homologatie onderhands akkoord (WHOA)
What you need to know.
The bill introduces a new way of debt restructuring outside of formal insolvency proceedings, that will change the way corporates negotiate with banks and creditors. By understanding how to use this restructuring tool, corporates can take the lead in potential restructurings and pro-actively approach their financiers with a restructuring plan that they can push through if need be.
Practical implications for treasurers
A general understanding of the WHOA is key for treasurers, given their responsibilities for risk, strategic and/or general financial management. Corporates in financial distress will have a new restructuring tool at hand and treasurers need to be aware of the features thereof when considering refinancing and restructuring options, and negotiating with their financiers. Also, treasurers of financially healthy corporates may be facing the use of this tool by their debtors in financial distress.
What you will learn?
- How to use WHOA as a tool when negotiating with your financiers
- How to perform a group restructuring through one umbrella restructuring plan
- How to protect restructuring efforts against claw-back actions
- How to include parent guarantees or other group company obligations
- How to set aside or issue equity without shareholder consent
- How to apply supporting court measures such as a stay (moratorium)
- How to get the deal through: WHOA does not allow appeal and the grounds for refusal of court confirmation are limited
Last Summer, a bill on the Act on court confirmation of extrajudicial restructuring plans (Wet homologatieonderhandsakkoord, WHOA) was sent to Parliament. Under the proposal, a debtor may offer an extrajudicial restructuring plan to all or some of its creditors and shareholders. If certain requirements are met, the restructuring plan can be confirmed by the court, making it binding on all affected parties.
Reinout Vriesendorp (Professor of Insolvency Law, Leiden University and partner of DBBW) and Ruud Hermans (Professor of Law Radboud University and formerly partner of DBBW) have drawn-up a first draft for the WHOA in 2014 and have remained closely involved in the drafting process ever since. WHOA combines the flexibility of the UK’s Scheme of Arrangements with the moratorium and deal certainty of the US’ Chapter 11. It is a major milestone which supports business continuity and recovery, and is compliant with the EU Directive on restructuring and insolvency. Given that we as a firm were there at the inception of the very first drafts of this bill, we are perfectly positioned to explain how the bill has been developed, what the considerations of key stakeholders have been thus far, and how corporates and corporate treasurers in particular can benefit from this restructuring tool in the near future.
15.00 – 15.30 Welcome
15.30 – 17.30 Master class
Location: De Brauw Office Amsterdam Claude Debussylaan 80 1082 MD AMSTERDAM
Level: beginner or intermediate
Language: Dutch or English if non-Dutch-speaking guests are present.