Sometimes it is unavoidable. You have fought to the bitter end but have not been able to turn the tide. The conclusion is that voluntarily petitioning for bankruptcy is your only remaining option. A bankruptcy can have many different causes and many entrepreneurs have had to cope with this situation in recent years. In most cases, the company will have been under the supervision of the Special Assets department for some time (click here for more information about Special Assets supervision). This article has been written for entrepreneurs who see no alternative other than voluntarily petitioning for bankruptcy. But even in that situation, there is still hope. The company can be relaunched. This article describes the issues that need to be considered and the opportunities associated with this procedure. It is a complex procedure which, if properly managed, can offer a realistic second chance.
The preparations
Firstly, we determine whether bankruptcy really is the only option available. In general, you are advised not to rush into a bankruptcy proceedings. For example, debt restructuring, either independently of or via the courts, maybe all that is needed to offer prospects of a healthy future.
Once you have decided to petition for bankruptcy, you need to consider whether relaunching the company is desirable and realistic. Will your customers do business with you again after a relaunch? Is adequate finance available for a relaunch? But you also should consider the more fundamental question of whether or not you want to continue running this company. Based on affirmative answers to these questions, we initiate a step-by-step process in order to guide and assist you.
We draw up an operational business case for the new company. Consideration is given to staffing, fixtures and fittings, stocks, vehicles, work in hand, the trading name and trademarks, licenses, etc. What would you like to purchase from the future receiver and what would you be prepared to pay? Third party rights such as suppliers’ retention of title and pledges held by the bank must also be taken into account. The cash position must be closely monitored during the new company's first few months of trading. After a bankruptcy, suppliers may impose shorter payment terms at a time when your new cash flow still needs to build up. Performing the analyses and preparations required for a company relaunch is a complex procedure for which good advice is indispensable.
We also look at the executive board’s position. What risks or financial implications exist? For example, reporting obligations exist in the Netherlands in relation to an inability to make payments to the Tax and Customs Administration and pension funds, etc. If these payment obligations are not fulfilled correctly, the executive board may be held liable. In addition, it is important to identify any guarantees or bank overdrafts. We also look at the position of other companies in the group. Can they continue trading, and what are the consequences if a subsidiary or sister company goes bankrupt. Typically, you need to consider what the implications are in relation to the tax entity, or the ‘403 guarantee’. During the preparatory period, we can also help you make an advance assessment of the result of the receiver’s regularity audit into the causes of the company’s bankruptcy and other issues. Obviously, your financial accounts must be completely correct and up-to-date.
Petitioning for voluntary bankruptcy
Once the preparatory phase has been completed, we petition for bankruptcy. A petition is filed with the court, which subsequently schedules a hearing. It is important that you continue to keep various stakeholders, such as your bank, properly informed. Time is extremely important during this phase. The plan you have drawn up must be discussed with the receiver appointed to your case as soon as possible. A receiver will also approach other parties in order to assess the level of interest in relaunching the company. One disadvantage of petitioning for voluntary bankruptcy is that the success of the relaunch depends on others to a certain extent; you need to reach an agreement with the receiver. This is a further reason for not rushing into a bankruptcy proceedings. If you have no other choice, we can offer you step-by-step guidance in this procedure, which you will undoubtedly experience as extremely stressful. Please contact us at any time to make an appointment for a free consultation meeting.
Contact Special Assets Desk:
Dirk School
E. school@bg.legal
T. +31 (0) 88 141 08 16
Marc Heuvelmans
E. heuvelmans@bgadvoacaten.nl
T. +31 (0) 88 141 08 16
Lisan Vermeer
E. vermeer@bg.legal
T. +31 (0) 88 141 08 16
