WHOA

The WHOA, also known as the “the Dutch scheme” provides financially distressed, yet viable businesses more options for restructure. Based on the English scheme, recent European bankruptcy law developments and US Chapter 11 procedures, the new tool entered into force in The Netherlands on 1 January 2021.

FIZ has closely followed the development and introduction of the WHOA. In April 2021, our partners have completed postgraduate qualifications covering the application of the tool in theory and practice. Our deep knowledge and extensive experience in insolvency, restructuring and complex financial transactions make FIZ a clear choice to capably assist both creditors and debtors where the WHOA comes into play. This includes advising from the outset as to whether the New Dutch scheme is the best option to pursue, and if not, advising on other options for best outcomes.

Under the WHOA, where a debtor is unlikely to be able to pay liabilities, the court can appoint a restructuring expert. Responsibilities of the expert include preparing a private restructuring plan. A debtor may also provide a plan. The plan provides options for the restructure of the debtor’s financial obligations.

In some cases, it may not be in the debtors best interests for this plan to be initiated. Informed by our strong track record in complex insolvency and restructuring matters, we can capably negotiate with creditors to solve the problem and close the deal, before this process is even initiated.

Where the WHOA is the best option and the debtor seeks to put forward a restructuring expert, FIZ has a strong track record and years of experience in the field and is well placed to assist in this capacity. We can also assist by offering an agreement on behalf of the debtor.

Our team can advise creditors on how to gain best outcomes where the WHOA may come into play. For example, a creditor may request the court to appoint a restructuring expert. We work closely with our clients to explore all possibilities for dealing with a debtor who looks unlikely to meet their financial obligations.

There are instruments in the WHOA that guarantee the rights of creditors, and we can assist creditors with these. On the other hand, in some cases the new option provided by the WHOA may not be the best option. Where the new tool does not look to achieve best results for the creditor, we can develop and advise on alternative solutions to better meet client objectives.

Where a debtor or creditor asks the court to appoint a restructuring expert, FIZ is a clear choice. We bring an exemplary track record, real world thinking, mediation skills, a neutral stance and the efficient win-win mindset upon which the new tool is based.

The WHOA also provides the option of appointing an observer to oversee the process. FIZ can also capably fulfil that role.

It is clear that there are benefits to be gained from the flexibility and efficiency that the WHOA seeks to provide. We also see that there are risks associated with the use of the tool, and are of the view that courts will need to exercise caution to ensure that the tool is fair for all creditors. While at the time of writing there are only four applications of the tool, we will watch closely to see if, and how, the theory behind this complex tool converts in practice.