Court Confirmation of Extrajudicial Restructuring Plans (WHOA)

Court Confirmation of Extrajudicial Restructuring Plans (WHOA): restructuring outside bankruptcy

Companies facing financial difficulties but fundamentally viable can restructure their debts through the WHOA without bankruptcy or suspension of payments. Since January 1, 2021, this law allows for a debt reduction agreement to be imposed on creditors or shareholders, even if they do not agree voluntarily. 

How does a WHOA process work? 

Through the WHOA, a company offers a restructuring agreement to (one or more classes of) creditors. If a majority within a class agrees, the court can homologate (approve) the agreement. Thereafter, the agreement applies to all parties involved, including those who voted against it. This way, bankruptcy can be avoided or a controlled settlement can be achieved, as a large part of the debt is extinguished. 

The WHOA is not only suitable for large enterprises; SMEs can also successfully utilize this arrangement. 

When is WHOA relevant? 

The WHOA can provide a solution in situations where: 

• The debt burden has become unsustainable; 
• Your company is still viable after restructuring; 
• One or more creditors do not want to cooperate with a voluntary agreement; 
• You wish to manage a controlled termination of the company in a timely manner. 

What can we do for you? 

Our specialists quickly and expertly assess whether a WHOA process is promising for your situation. An appeal to the WHOA is not simple; stringent requirements must be met. We assist with: 

• The preparation and development of the agreement; 
• The communication with creditors and shareholders; 
• Guidance during the WHOA procedure at the court; 
• Acting as a restructuring expert or observer, if necessary. 

Thanks to our experience with restructurings, insolvency procedures and financial negotiations, we are able to strategically guide your business through every stage of the WHOA process. 

Are you considering a WHOA process or are you faced with an agreement from one of your creditors? Contact us for legal and practical advice.