Chamber of Commerce Act homologation private agreement (WHOA)

That's how the WHOA works

Until January 1, 2021, there was only an agreement when all creditors and shareholders agreed. If 1 creditor or shareholder crosses herself, this could lead to bankruptcy. The WHOA has been in force since 1 January 2021. With the WHOA roadmap you follow the road from preparation to approval step by step. The debtor consults with creditors. These agreements are recorded in a draft agreement. This draft debt settlement agreement must be voted on. Subsequently, the court confirms (homologation) the agreement on the proposed debt settlement. Even if not all creditors or shareholders involved in the plan agree. This is also called a compulsory composition, because creditors and shareholders must comply with the composition by this law. Even if they have to settle for, say, a partial write-off, debt cancellation or deferment of payment. The entrepreneur with debts maintains control over his company during the WHOA process and can continue to do business.

The content and structure of the agreement must meet a number of requirements. One of the elements of the new law is that the entrepreneur divides his creditors into classes. Think of creditors with a different ranking, such as the tax authorities and pledgees or mortgage holders. The WHOA gives the entrepreneur the freedom to arrange the composition with creditors (creditors) themselves. For example, you are free to offer a composition to one or more classes of creditors and not to other classes. " The creditors who you do not approach for a settlement, retain their right to full payment of the outstanding debts. A majority within 1 class must agree with the proposal.

The judge must then confirm the agreement. If that happens, those who vote against must also stick to the agreement. Even if they have to settle for less than the entire claim. The new law also provides for small independent creditors. “For small SMEs, companies with less than 50 employees, it has been determined that they must get a minimum of 20% of their outstanding receivable. This means that the position of smaller SMEs is also better secured. ”

The WHOA also changes somewhat with regard to current agreements such as rent. The tenant can unilaterally terminate this with the permission of the judge, if the landlord does not agree to a proposed voluntary change or termination. “Since the bottleneck for many companies is mainly in the rent of the industrial space, the WHOA offers some relief.

Registration in the Trade Register

Do you have branches, parts or interests in the EU? Then you can benefit from a public agreement procedure, because it is recognized by EU member states. Public settlement procedures will be registered and published in the public Insolvency Register from 1 January 2021. It is expected that the public approval procedures will also be registered and published in the Trade Register from April 1, 2021. This is an additional registration in addition to the Insolvency Register. Just as is currently the case with 'moratorium' and 'bankruptcy' and 'debt restructuring'.

Most important points when deploying WHOA

The company will no longer be able to pay its debts now or in the future. The purpose of an arrangement must be: - averting the impending bankruptcy of a company that is financially healthy again after restructuring; - the winding up of a company without a chance of survival, whereby a better result for creditors is achieved through the composition than with a bankruptcy. There must be a feasible and well-considered composition. The decision-making on and the content of the composition must comply with a number of legal requirements. An important condition is that the composition must be reasonable to be. This means, for example, that creditors and shareholders must not be placed in a more disadvantageous position as a result of the composition and that the working conditions of the staff must not change.

For all companies

The WHOA becomes part of the Bankruptcy Act (Fw) and applies to all companies. We estimate that sole traders and self-employed persons will also make more use of the new law in the future. "Sole proprietorships and self-employed persons may also make use of the Natural Persons Debt Restructuring Act (WSNP), but generally do not make much sense to have to run with an administrator for more than 3 years, as is the case with the WSNP." WSNP is only possible if you quit your business. The advantage of the WHOA is that it offers entrepreneurs a more practical and faster solution, with the same result as the WSNP. Possible consultancy costs for guiding a WHOA process, which can amount to a few thousand euros in, for example, accountant costs and legal costs, can still be an obstacle for a small self-employed person. ”

WHOA is one of the options

When bankruptcy approaches, there are several options. Debt restructuring via amicable settlement or WSNP or bankruptcy. The WHOA has now been added. Schuurman indicates that many entrepreneurs want to avoid bankruptcy: “Because a trustee takes over your company when the court orders bankruptcy. The curator will then ensure that your creditors are paid. Bankruptcy can take years and even at the end of a bankruptcy, you can still have debts. ”The new law is a very welcome addition to existing practice. “It offers entrepreneurs in difficulty a solution in a threatening bankruptcy situation. Moreover, the WHOA is faster and more efficient than the existing regulations. ”

Arrange preparation and agreement yourself

The entrepreneur can prepare and offer a composition to his creditors and shareholders without the help of third parties. When preparing an agreement, the entrepreneur files a statement with the registrar of the court, stating that he has started the WHOA process. A lawyer is needed when the homologation request is submitted to the court. Several parties are involved in a WHOA proceeding. In general, an entrepreneur can be supported by a legal or financial advisor throughout the WHOA process. The debtor can also ask the court to appoint a restructuring expert, who will offer the composition instead. He can do this, for example, to avoid any appearance of a conflict of interest. Or to increase confidence in the process and thus the chances of success of the plan. It is also possible for creditors, shareholders or a possible works council (OR) or employee representation to take the initiative and initiate the WHOA. They can ask the court to appoint a restructuring expert. The latter can then prepare a composition and submit it to the relevant creditors and shareholders.

To work

To submit your approval to the court, you must do the following: Consult your bank, landlord, suppliers and shareholders Make agreements about, for example: - deferment of payment - debt cancellation - conversion of debts into shares in the company. agreements in a draft agreement. Make sure that you place the relevant creditors and shareholders in different classes. You do this on the basis of their legal position and various agreements you want to make with them. Present the draft agreement to your creditors and shareholders. Make sure that they can study the plan at least 8 days before the vote. Organize a vote for the creditors and shareholders involved in the plan. Prepare a report within 7 days of the vote stating, among other things, the outcome of the vote . Share this report with affected creditors and shareholders. Read about the conditions in the article: Avoid bankruptcy with WHOA.