1.1 Opening of the proceeding

Bankruptcy can be petitioned for by one or more of the creditors of the debtor (involuntary filing), by the debtor himself (voluntary filing), or in the exceptional case the public interest so requires, by the public prosecutor. A bankruptcy proceeding can also be opened following a suspension of payments proceeding or a debt rescheduling scheme.

A bankruptcy can be petitioned in the Netherlands before the district court of (i) the place of the debtor’s residence or domicile in the Netherlands, (ii) if the debtor has moved out of the Netherlands, the last known place of domicile of the debtor in the Netherlands and (iii) if the debtor does not have a place of domicile in the Netherlands, but does conduct a business or enterprise in the Netherlands, the place where the debtor has an office. Companies are domiciled at the place of their incorporation and registration with the Trade Register. The official domicile of the company is designated in its Articles of Association.

Any creditor, even a foreign creditor, may file a bankruptcy petition. All debtors, including natural persons, companies and other legal entities (such as foundations and associations) and commercial partnerships, may be declared bankrupt. There is no legal obligation for a debtor to file a bankruptcy petition.

The legal ground for a bankruptcy declaration is that “the debtor has ceased to pay his debts” (i.e. is in a state of “equitable insolvency”). A creditor requesting the bankruptcy of a debtor has to provide prima facie evidence of the fact that he has a claim against the debtor, that the debtor is unable to pay his debts and that there is at least one other creditor. At least one of the debts of the creditors has to be currently due and payable.

If a petition for bankruptcy is granted, the district court will appoint a bankruptcy trustee (curator), who is usually a member of the local bar, and one of the members of the courts as a supervisory judge (rechter- commissaris). The trustee acts under the general supervision of the supervisory judge. The court order opening the proceeding must, without delay, be published by the trustee in the Official Gazette (Nederlandse Staatscourant). There is a legal assumption that after publication everybody is aware of the existence of the insolvency proceedings.

1.2 Effects of the Bankruptcy Declaration

The objective of a bankruptcy proceeding is the liquidation of the debtor’s assets and distribution of the proceeds to the creditors each according to their rank while observing the legal rules on equal treatment of creditors.

Bankruptcy is regarded as a general attachment on all of the debtor’s assets (included assets obtained during the bankruptcy itself) for the benefit of his joint creditors. From the moment bankruptcy is declared, all attachments of the debtor’s property which benefit specific creditors terminate and are replaced by the general bankruptcy attachment.

The estate (de boedel) includes all property of the debtor as of the time the petition of bankruptcy is filed as well as all property acquired during the bankruptcy proceedings, including real property, personal property, tangible and intangible property and interest in property held by others. The debtor loses the power to manage and dispose of his assets (beschikkingsbevoegdheid) with retroactive effect to 00.00 hrs. of the day that the bankruptcy order is issued. This power is put completely in the hands of the trustee, who acts under the supervision of the supervisory judge. Only the trustee may dispose of the property of the estate. The debtor cannot act on behalf of the estate nor can he bind the estate. The estate is not liable for obligations incurred by the debtor after bankruptcy is declared (post bankruptcy transfers), except to the extent that such obligations arise from transactions which benefit the estate or are performed by the trustee in bankruptcy.

1.3 Procedure in a Bankruptcy Case

The trustee is charged with the administration and liquidation of the bankrupt’s estate. Immediately upon his appointment, the trustee must take any necessary steps to preserve the estate. All creditors’ actions and claims are automatically stayed. After consultation with the supervisory judge, the trustee will decide whether or not he will temporarily continue any of the bankrupt’s business. This is done only if clearly favourable business prospects exist. If the business activities are not continued, the trustee may sell the assets provided that this does not contravene any special security interests belonging to a creditor. The law provides that realisation of assets takes place by public auction, but that the trustee may realise assets by private contract with the approval of the supervisory judge, which the trustee usually does.

The trustee has special statutory authority to terminate leases and employment contracts. He also has the power to invoke the actio Pauliana if the rights of recourse on the debtor’s assets have been prejudiced by legal acts performed by the debtor without obligation, and the right to institute a claim against the management board or directors of a bankrupt company. As a general rule managing directors of Dutch companies are not liable for the obligations of the company, but if the management board has performed its tasks in an apparently improper manner and this is likely to have been an important cause of the company’s bankruptcy (Articles 138 and 248 of book 2 of the Dutch Civil Code), the trustee can hold all directors personally liable, on a joint and several basis, for the entire deficit of the bankruptcy (all costs of the bankruptcy and the amount of debt that remains unpaid after liquidation of the assets). Apart from this specific personal liability in bankruptcy, Article 9 of book 2 of the Dutch Civil Code gives a more general provision for personal directors’ liability vis-à –vis the company in case of improper performance of their tasks; in case of bankruptcy, the trustee may also institute a claim against directors on the basis of this article.

Every three months the trustee must file a public report concerning the debtor’s assets and liabilities at the court registry. These public reports are available at the courts and published on http://insolventies.rechtspraak.nl/.

The trustee is subject to the supervision of the supervisory judge. For certain acts, the trustee needs the authorisation of the supervisory judge, e.g. conducting legal proceedings, terminating employment and rental contracts and realisation of assets by private contract. In certain cases the supervisory judge can, at the request of the debtor or a creditor, order the trustee to perform a specific act or to refrain from performing an intended act. The court has the power to dismiss the trustee at the request of the supervisory judge, a creditor or a debtor.

If desired by the creditors, the court may nominate a committee of creditors to advise the trustee. The trustee, however, is not bound by the committee’s recommendations. In practise, the nomination of a creditors’committee is exceptional.

Creditors, not secured by a right of mortgage (recht van hypotheek) or pledge (recht van pand) or equivalent valid and binding foreign security right, must present their claims in writing to the trustee. A simple letter outlining the claim is sufficient. In most cases a creditors’ meeting (verificatievergadering) will be held before the court only when the proceeds of the assets exceed the debts of the estate (boedelschulden) and the claims of the tax collector and social security administrations. A creditors’ meeting is chaired by the supervisory judge and is attended by the trustee and the debtor. All creditors are entitled to attend the meeting, but this is not mandatory. The purpose of the meeting is either to allow or to challenge the claims and to classify them as preferred or nonpreferred. If a claim is contested, the bankruptcy judge will order that legal proceedings (renvooiprocedure, see Section 122 Bankruptcy Act) be initiated to determine whether the claim should be accepted.

1.4 Creditors’ Rights

Creditors with insolvency claims are entitled to the proceeds of the realisation of the debtor’s assets. Insolvency claims are, as a rule, claims that have arisen before the opening of the proceeding. Certain claims are regarded as claims against the estate (boedelschulden). In general, claims which arise as a result of or following a declaration of bankruptcy are considered claims against the estate. Examples of these claims are the costs of the bankruptcy trustee, the costs of liquidating the estate and the wages of employees of the bankrupt company as of the date of the bankruptcy declaration. Claims against the estate have to be satisfied in priority to insolvency claims and need not be submitted in the claims validation procedure.

The leading principle of Dutch bankruptcy law is the so called paritas creditorum which means that all creditors have an equal right to payment and that the proceeds of the bankrupt’s estate shall be distributed in proportion to the size of their claims. However, there are two groups of creditors to whom this principle of paritas creditorum does not apply:

  • I. secured creditors (separatisten); and
  • II. creditors who have a preference by virtue of the Dutch Civil Code or any other relevant Act.
    Therefore, the paritas creditorum creditors (concurrente crediteuren) are those who have an unsecured claim and are not preferred creditors; they share pro rata parte in the amount available to them.

Secured creditors
Secured creditors (separatisten) may exclude the collateral from the debtor’s estate and execute on their security: in principle the creditor is entitled to prompt foreclosure even if the debtor has been adjudicated bankrupt.

However, the court may, for a period of two months with a possible extension of two months, order a general stay (“Cooling Down Period”) of all creditors’ actions, including foreclosure by secured and privileged creditors.

After or in the absence of a possible Cooling Down Period, a secured creditor, may therefore act “as if there were no bankruptcy”. As a result, the trustee is not entitled to retain the encumbered property. Because the secured creditor obtains payment of his claims by executing on the security, he cannot be charged with bankruptcy costs. The automatic stay of all actions against the debtor which results from a declaration of bankruptcy does not apply to secured creditors.

Secured creditors are:

  • I. creditors who hold a mortgage; and
  • II. creditors who hold a right of pledge.
    The mortgagee and the pledgee are entitled to sell the collateral by public sale or private sale, subject to the consent of the competent court without the cooperation of the bankruptcy trustee. They are further entitled to apply the proceeds of the sold collateral to their claims. Any excess proceeds must be remitted to the trustee.

Preferred creditors
There are two categories of preferred creditors:

  • I. creditors who have a statutory priority; and
  • II. creditors who have a non statutory priority;
    Preferred creditors are not entitled to initiate foreclosure proceedings as are secured creditors. They are required to present their claims to the trustee and are thereby charged their pro rata share of the costs of the bankruptcy.

Some creditors are in the position of having a right which in fact operates as a priority. The main rights which enable the creditor to enforce a priority are the right of set off (compensatie) and the seller’s right to recovery (recht van reclame).

Unsecured Creditors
As explained above, the equality of all creditors is an underlying principle of Dutch bankruptcy law. Unsecured and non-preferred creditors are paritas creditorum creditors: they do not have any preference and will therefore be paid, if any proceeds of the estate remain, after all other creditors have received payment.

1.5 Termination and Distribution of Proceeds

There are five ways in which a bankruptcy can terminate: cancellation (vernietiging), liquidation (vereffening), closing (opheffing), simplified completion (vereenvoudigde afwikkeling) and composition (accoord).


A bankruptcy can be cancelled by the court through the successful opposition of the debtor, a creditor or an interested third party or by the court of appeal through a successful appeal by the debtor. If the bankruptcy is not cancelled, the bankruptcy will terminate by liquidation, closing, simplified completion or composition.


The purpose of liquidation is to distribute the proceeds of the assets of the estate to the creditors. A bankruptcy will only be liquidated (in the legal sense) if unsecured creditors will receive at least some payment.

In case of a liquidation or a composition, a meeting of creditors (verficatievergadering) will be held on a date chosen by the judge. The purpose of the meeting is to list and to classify all claims. Claims can either be accepted or challenged. If the trustee and the creditor whose claim is challenged do not settle their dispute, the supervisory judge will order that legal proceedings (renvooiprocedure) be initiated to determine whether the claim should be accepted.

After the list of accepted claims is finalised, the trustee prepares a plan of distribution (uitdelingslijst), which shows the net worth of the estate and indicates what percentage of the claims will be paid to the creditors. This plan must be approved by the supervisory judge. Upon approval, the plan is filed with the district court and may be examined by the creditors within the ten day period following the filing of the plan.

Creditors may oppose the plan by filing a petition showing cause. The judge will then order a hearing in which the trustee and the creditor are heard. The court will render its opinion on the day of the hearing, or as soon as possible thereafter.

In the event none of the creditors oppose the plan, the bankruptcy terminates ten days after the plan is filed. If there is an opposition, the bankruptcy terminates immediately after the district court’s decision. This decision, however, is subject to appeal.


Closing procedures are followed in cases where there are little or no assets. In practice, bankruptcies are closed when there are only enough assets to wholly or partially pay the costs of the bankruptcy proceedings.

If the trustee concludes that the bankruptcy should be closed, he will advise the supervisory judge accordingly. The supervisory judge may then advise the district court to close the bankruptcy. Neither liquidation nor closing results in a final discharge of the bankrupt’s debts. If the bankrupt is a corporation or other legal entity, however, a bankruptcy proceeding resulting in liquidation or closing will result in the dissolution of the entity.

Simplified completion

This procedure is used when no payment can be done to non-preferred creditors, but the assets are enough to wholly or partially pay the claims of the tax collector and/or social security administration. On request of the trustee or ex officio the supervisory judge may decide that the handling of non-preferred claims will not take place and no meeting of creditors will be held.

The trustee prepares a plan of distribution (uitdelingslijst), which shows the net worth of the estate and indicates what percentage of the claims will be paid to the tax authorities and/or social security administration. The further procedure is equal to the procedure described above by liquidation. In the event none of the creditors oppose the plan of distribution, the bankruptcy terminates ten days after the plan is filed.


A composition is an agreement between the debtor and his creditors which provides for (partial) payment of creditors in full satisfaction of their claims. If the composition is accepted by the creditors, then the estate will not be liquidated. However, the debtor has only one opportunity to present a plan; if the proposal for a composition is not accepted, the debtor is not allowed to make a new proposal.
The debtor and all of his creditors are free to agree to whatever terms of payment they choose. In most cases all creditors receive an equal percentage of their claim as payment in full; the bankrupt’s debts will then be discharged.

The composition is proposed by the debtor or by his representative. It should be presented at least eight days before a meeting of creditors. In most cases the creditors’ meeting will be held because the debtor has made a composition proposal. During the meeting the trustee submits his written opinion on the proposal for the composition. The non-preferred and unsecured creditors may then vote on the proposal. Acceptance of the proposal requires the approval of a 50 percent majority of all acknowledged appeared non-preferred and unsecured claims representing 50 percent of the total amount of such claims (including the non-appeared). However, if despite an approval of a 75% majority of all acknowledged appeared non-preferred and unsecured claims the proposal is not accepted, the supervisory judge may ascertain acceptance of the proposal under certain conditions mentioned in the law. If the proposal for the composition is accepted, then the supervisory judge refers the bankruptcy case to the district court which must approve the composition in order for it to become enforceable. Creditors may object to the approval during the course of this court hearing. The district court must decide, on the day of the session or as soon as possible thereafter, whether or not the composition should be approved. If the composition is approved it binds all non-preferred and unsecured creditors, even if they did not present their claim to the trustee or voted against the composition. The bankruptcy proceeding will then terminate within eight days, whereupon the Court’s decision of approval is no longer subject to appeal.

Publisher: Van Ewijk advocaten mediators