Dutch court torpedoes attempt to bypass procedural regulation

A recent decision in a Dutch court thwarted an attempt circumvent the maximum time period for retaining a bankruptcy request. Dutch debt collection lawyer Thomas van Vugt discusses how a request for a declaration of bankruptcy in the Netherlands works on the basis of the ruling.

Procedural regulation of petition procedures in debt collection cases in the Netherlands

The Dutch procedural regulation of petition procedures and debt collection cases indicates the rules about the request for a declaration of bankruptcy and the course of insolvency proceedings before the Dutch court. On the basis of this regulation, a request for a declaration of bankruptcy (in principle) cannot be submitted more than four times, nor for a total of more than eight weeks.

Three petitions for resubmission due to negotiations

In this question at hand, a request for a declaration of bankruptcy was first retained for a period of two weeks at the petitioner’s request. This retention was followed by another request for a period of two weeks, and a third petition for a period of four weeks followed, since parties had entered negotiations in the meantime.

Both bankruptcy requests rescinded by the Dutch court

Prior to the expiration of the last retention, the petitioner submitted a new (i.e., thus, a second) and identical bankruptcy request, and a date was established for the hearing. At that point, the claimant withdrew the first bankruptcy request. However, in response to this withdrawal, the court indicated to the petitioner that no hearing for either of the bankruptcy requests would take place.

Dutch court did not approve the second petition

This is not what the petitioner was hoping for. This party’s sole intention was to withdraw the first request so that the second, identical request would continue now that the maximum term of retention for the first petition had been reached. The court did not go along with this.

Dutch court: identical petitions denied

The court found that a maximum period of retention keeps bankruptcy requests from being retained for (too) long and (too) often, which would then allow them to become more of an object of leverage for the collection of claims. Furthermore, the requests were identical: so no distinction could be made, either.

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AMS Advocaten has extensive experience in the area of bankruptcy law, both domestic and international. Do you have questions about the practical course of affairs or the consequence of a suspension of payments or a bankruptcy? Do contact our office.