Dutch Court Torpedoes Attempt to Bypass Procedural Regulation

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A recent decision in a Dutch court thwarted an attempt circumvent the maximum time period for retaining a bankruptcy request. AMS discusses how a request for a declaration of bankruptcy in the Netherlands works on the basis of the ruling.

The Dutch procedural regulation of petition procedures and debt collection cases indicates the rules about the request for a declaration of bankruptcy and the course of insolvency proceedings before the Dutch court. On the basis of this regulation, a request for a declaration of bankruptcy (in principle) cannot be submitted more than four times, nor for a total of more than eight weeks.

this question at hand, a request for a declaration of bankruptcy was first retained for a period of two weeks at the petitionerís request. This retention was followed by another request for a period of two weeks, and a third petition for a period of four weeks followed, since parties had entered negotiations in the meantime.

Prior to the expiration of the last retention, the petitioner submitted a new (i.e., thus, a second) and identical bankruptcy request, and a date was established for the hearing. At that point, the claimant withdrew the first bankruptcy request. However, in response to this withdrawal, the court indicated to the petitioner that no hearing for either of the bankruptcy requests would take place.

This is not what the petitioner was hoping for. This partyís sole intention was to withdraw the first request so that the second, identical request would continue now that the maximum term of retention for the first petition had been reached. The court did not go along with this.

The court found that a maximum period of retention keeps bankruptcy requests from being retained for (too) long and (too) often, which would then allow them to become more of an object of leverage for the collection of claims. Furthermore, the requests were identical: so no distinction could be made, either.

Heleen advises and litigates in matters of corporate law, employment law, contract law and debt collection.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.

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