Creditor in an expedited liquidation, now what?

You can find more information on expedited liquidations here. In an unlawful expedited liquidation, the position of creditors is not very strong. They only have limited remedies available to them. Nevertheless, this could potentially be changed by the proposed Expedited Liquidation Transparency (Interim Measures) Act (Tijdelijke wet transparantie turboliquidatie).

Creditor in an expedited liquidation, now what?

An expedited liquidation is unlawful if it turns out afterwards that there were assets in the dissolved company after all. Creditors can currently take the following steps if an expedited liquidation is unlawful:

• Submit a petition to reopen the liquidation under Article 2:23c of the Dutch Civil Code (Burgerlijk Wetboek);
• File for bankruptcy of the company;
• Hold a director liable due to careless liquidation of the company.

It is difficult for creditors to assess whether or not an expedited liquidation is unlawful. This is because creditors do not have access to documents of the liquidated company and can only request the annual report from the Chamber of Commerce. As a result, creditors are often left empty-handed after an expedited liquidation.

The Expedited Liquidation Transparency (Interim Measures) Act

Currently, it is up to creditors to prove the existence of assets of the liquidated company. This is very difficult to substantiate given the information disadvantage of creditors. The proposed Expedited Liquidation Transparency (Interim Measures) Act intends to strengthen the position of creditors. The board of a company wishing to proceed with an expedited liquidation must now file the following documents with the Chamber of Commerce within ten days of the expedited liquidation:

• a balance sheet and a statement of assets and liabilities for the financial year in which the company was dissolved;
• a written statement of the reasons for the absence of assets at the time of dissolution;
• a written statement of the reasons for creditors going unpaid, if applicable;
• a written statement of the manner in which assets were distributed to creditors prior to liquidation in connection with the settlement of the liquidated company, if applicable;
• the annual financial statements for the financial years preceding the financial year in which the company was dissolved, including an auditor’s report, if there is a statutory obligation to do so under Book 2 of the Dutch Civil Code that has not yet been fulfilled, if applicable.

If the board fails to fulfil this duty under the proposed Article 2:19b(1) of the Dutch Civil Code, it may be punishable under the Economic Offences Act (Wet op de economische delicten). In addition, the proposed Expedited Liquidation Transparency (Interim Measures) Act strengthens the position of creditors in an unlawful expedited liquidation: they can now request the above documents from the Chamber of Commerce.

The proposed Expedited Liquidation Transparency (Interim Measures) Act is currently in the preparatory phase before the Lower House. Following this, the Lower House will debate the proposed Act.

Do you need assistance with an expedited liquidation?

Are you a creditor of a company that you suspect was liquidated unlawfully? Or are you a director and do you wish to carry out an expedited liquidation in a diligent manner? Please do not hesitate to contact us.