Parties involved in bankruptcy

Bankruptcy has a significant impact on all parties involved. Clarity at an early stage is essential. Below, you will find an overview of the key questions and answers for each group. If you have a specific question, please contact us. We are happy to help.

1. Entrepreneurs

Considering a restart?
Though this may sound strange, bankruptcy can also create opportunities. Parts of a business can often be acquired at a relatively low price. This may include “cherry picking”, where selected assets are taken over without assuming the debts.

A restart requires speed as well as careful coordination. We help structure the process and support you in reaching clear agreements with the insolvency practitioner.

2. Directors, Supervisory Board Members and Auditors

Risk of liability?
Insolvency practitioners investigate the causes of the bankruptcy and the events leading up to it. This may lead to liability claims against directors, supervisory board members or auditors.

It is important to seek legal advice at an early stage. Statements made early on may be used against you later. We support throughout the investigation and, where necessary, in any subsequent liability proceedings.

3. Customers

What happens to purchases?
In retail bankruptcies, shops may remain open temporarily. In that case, exchanges are sometimes still possible, but refunds are usually not. Gift cards and vouchers often lose their value, unless the insolvency practitioner decides otherwise.

4. Creditors

Is legal action still possible?
In most cases, it is not. During bankruptcy proceedings, payment can no longer be enforced through legal action or attachment.

What happens to ongoing proceedings?
Ongoing proceedings are suspended and attachments lapse. The insolvency practitioner decides whether proceedings will continue.

How can a claim be filed?
Claims can be submitted to the insolvency practitioner for verification. The ranking of the claim is important, and in some cases set-off may be possible.

5. Employees

What happens to the employment contract?
The insolvency practitioner will usually terminate the employment contract with a short notice period, up to a maximum of six weeks.

How is salary paid?
The UWV (Employee Insurance Agency) pays salary during the notice period and covers part of the outstanding salary under the wage guarantee scheme.

Do contractual clauses still apply?
In principle, clauses such as confidentiality and non-compete obligations remain in force, unless agreed otherwise with the insolvency practitioner.

6. Suppliers

Retention of title?
If a retention of title has been agreed and the goods are still in the possession of the bankrupt organisation, they can be reclaimed. This should be reported to the insolvency practitioner as soon as possible.

Right of reclamation?
Even without a retention of title, goods may be reclaimed under certain conditions, provided the legal requirements are met and action is taken promptly.

Right of retention?
If goods are held and payment has not been made, a right of retention may be exercised, subject to certain conditions. In some cases, the insolvency practitioner may set this aside.

Ongoing agreements?
Agreements do not end automatically. The insolvency practitioner can be asked to perform them. If performance is refused, the agreement can be terminated.

Temporary continuation?
The insolvency practitioner may continue operations temporarily. In that case, it is important to make clear arrangements on payment and, where necessary, to request security.

7. Landlords

Can the lease be terminated?
Yes, with three months’ notice. The insolvency practitioner has the same right, regardless of contractual provisions.

What happens to rent claims?
Rent during the notice period qualifies as an estate claim and takes priority. Older claims can be submitted for verification in the bankruptcy.

Use of the premises?
During the notice period, the insolvency practitioner may continue to use the premises. At the end of that period, the premises must be returned in a clean and proper condition.