Absolute priority rule

The court in WHOA proceedings can refuse homologation of a composition because it conflicts with the absolute priority rule if a dissenting creditor from a dissenting class so requests. The absolute priority rule means that in a WHOA composition, the reorganisation value must be divided in accordance with the applicable ranking, unless there are reasonable grounds for deviation and the interests of creditors or shareholders requesting refusal will not be adversely affected. See Article 384(4)(b) of the Faillissementswet (Bankruptcy Act).