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COV­ID-19: Leg­al Q&A
The con­sequences of the corona crisis raise many un­cer­tain­ties for com­pan­ies. In this Q&A sev­er­al prac­tice area groups an­swer the most fre­quently asked ques­tions. This page will be reg­u­larly up­dated as more in­form­a­tion about COV­ID-19 and its im­plic­a­tions be­comes avail­able. <em­phas­is role="strong">Table of con</em­phas­is><em­phas­is role="strong">ten</em­phas­is><em­phas­is role="strong">t</em­phas­is><link xlink:href="ht­tps://cms.law/en/nld/pub­lic­a­tion/cms-corona-leg­al-team-q-a#Ad­min­is­trat­iveLaw" xlink:show="none" xlink:title=""><em­phas­is role="strong">Ad­min­is­trat­ive Law</em­phas­is></link>What if I re­ceive an or­der sub­ject to pen­alty or an (oth­er) ad­min­is­trat­ive en­force­ment or­der whilst - be­cause of COV­ID-19 - it is dif­fi­cult or im­possible to com­ply with the or­der (on time)?Can an ad­min­is­trat­ive fine be re­duced or re­voked be­cause it was im­possible to com­ply with the law dur­ing the COV­ID-19 crisis?When does a situ­ation of ad­min­is­trat­ive force ma­jeure ex­ist and what should the ad­min­is­trat­ive au­thor­ity do in case of force ma­jeure?What can the ap­plic­ant do in case the au­thor­ity ex­ceeds the de­cision-mak­ing term?<link xlink:href="ht­tps://cms.law/en/nld/pub­lic­a­tion/cms-corona-leg­al-team-q-a#RealEstate­Con­struc­tion" xlink:show="none" xlink:title=""><em­phas­is role="strong">Real Es­tate & Con­struc­tio</em­phas­is><em­phas­is role="strong">n</em­phas­is></link>Can I as a con­tract­or in­voke a force ma­jeure clause so that I have the right to be com­pensated for cost-in­creas­ing cir­cum­stances and/or my con­struc­tion time be­ing pro­longed?Can I as a cli­ent ter­min­ate a con­tract in the event of the con­struc­tion time be­ing pro­longed or cost-in­creas­ing cir­cum­stances due to the corona-pan­dem­ic?<em­phas­is role="strong"><link xlink:href="ht­tps://cms.law/en/nld/pub­lic­a­tion/cms-corona-leg­al-team-q-a#RealEstateIm­pact" xlink:show="none" xlink:title="">Real Es­tate - Im­pact on lease agree­ments</link></em­phas­is>Is a less­ee eli­gible for rent re­duc­tion due to a sig­ni­fic­ant de­cline in foot­fall and con­sequently its turnover as a res­ult of COV­ID-19?Is a less­ee eli­gible to tem­por­ar­ily close its leased space - on its own ini­ti­at­ive – and opt for rent re­duc­tion as a res­ult of COV­ID-19?Is a less­ee eli­gible for rent re­duc­tion in the event its leased space is closed fol­low­ing an or­der by the Gov­ern­ment as a res­ult of COV­ID-19?Is there any (bind­ing) COV­ID-19 reg­u­la­tion ap­plic­able to com­mer­cial lease agree­ments?Are there any guidelines/agree­ments ap­plic­able to re­tail prop­er­ties? Could a less­ee con­sider oth­er leg­al op­tions, such as a lease ter­min­a­tion, or oth­er op­tions as a res­ult of COV­ID-19?Does the out­break of COV­ID-19 jus­ti­fies in­vok­ing force ma­jeure by less­ee? <link xlink:href="ht­tps://cms.law/en/nld/pub­lic­a­tion/cms-corona-leg­al-team-q-a#Com­mer­cial" xlink:show="none" xlink:title=""><em­phas­is role="strong"><em­phas­is role="strong">Comm</em­phas­is></em­phas­is><em­phas­is role="strong"><em­phas­is role="strong">er­cial</em­phas­is></em­phas­is></link>Is COV­ID-19 a case of force ma­jeure?What ob­lig­a­tions do I have in a force ma­jeure situ­ation?Am I ob­lig­ated to ful­fil my con­trac­tu­al agree­ments in a force ma­jeure situ­ation?Do I owe com­pens­a­tion in case of non-per­form­ance due to force ma­jeure?Am I li­able for a po­ten­tial con­trac­tu­al fine in case of non-per­form­ance due to force ma­jeure?Can I al­ter the agree­ment be­cause of COV­ID-19?<link xlink:href="ht­tps://cms.law/en/nld/pub­lic­a­tion/cms-corona-leg­al-team-q-a#Em­ploy­ment" xlink:show="none" xlink:title=""><em­phas­is role="strong"><em­phas­is role="strong">Em­ploy</em­phas­is></em­phas­is><em­phas­is role="strong"><em­phas­is role="strong">ment</em­phas­is></em­phas­is></link>When is an em­ploy­er en­titled to a sub­sidy un­der the Tem­por­ary Emer­gency Meas­ure Bridging for Em­ploy­ment (NOW)?How much sub­sidy do I re­ceive un­der the NOW?Un­til when can I claim NOW? Can I amend em­ploy­ment con­di­tions be­cause my em­ploy­ees do not (or can­not) work or be­cause my turnover is heav­ily de­creas­ing, wheth­er or not in com­bin­a­tion with the NOW sub­sidy?In or­der to safe­guard the health and safety of em­ploy­ees as much as pos­sible, I want to pre­vent em­ploy­ees from un­in­ten­tion­ally in­fect­ing oth­ers with the coronavir­us. What kind of ques­tions can I ask about the health of my em­ploy­ees?<link xlink:href="ht­tps://cms.law/en/nld/pub­lic­a­tion/cms-corona-leg­al-team-q-a#In­sur­ance" xlink:show="none" xlink:title=""><em­phas­is role="strong">In­sur­ance</em­phas­is></link>Do in­sur­ance policies provide cov­er for losses caused res­ult­ing from the cur­rent COV­ID-19 out­break?<em­phas­is role="strong"><link xlink:href="ht­tps://cms.law/en/nld/pub­lic­a­tion/cms-corona-leg­al-team-q-a#Cor­por­ate" xlink:show="none" xlink:title="">Cor­por­ate</link></em­phas­is>Is it pos­sible to hold a gen­er­al meet­ing fully di­git­ally?What are the dif­fer­ent ways for mem­bers of a co­oper­at­ive or an as­so­ci­ation to ad­opt res­ol­u­tions?<link xlink:href="ht­tps://cms.law/en/nld/pub­lic­a­tion/cms-corona-leg­al-team-q-a#Bank­ingFin­ance" xlink:show="none" xlink:title=""><em­phas­is role="strong">Bank­ing and Fin­ance</em­phas­is></link>Which fin­an­cial short-term com­pens­a­tion schemes for im­me­di­ate losses due to COV­ID-19 have been im­ple­men­ted for en­tre­pren­eurs?Are there any ma­jor factors that may in­hib­it an ap­plic­ant from suc­cess­fully ap­ply­ing for a sta­bil­isa­tion meas­ure?<em­phas­is role="strong"><link xlink:href="ht­tps://cms.law/en/nld/pub­lic­a­tion/cms-corona-leg­al-team-q-a#In­solv­encypro­ceed­ings" xlink:show="none" xlink:title="">In­solv­ency pro­ceed­ings</link></em­phas­is>What are the main in­solv­ency pro­ceed­ings for com­pan­ies in the Neth­er­lands?What are the form­al re­quire­ments to ap­ply for in­solv­ency pro­ceed­ings?What are the in­solv­ency ap­plic­a­tion dead­lines?Have the in­solv­ency rules and timelines been amended due to the COV­ID-19 crisis?Is there a leg­al ob­lig­a­tion to file for bank­ruptcy; if so what are the con­sequences for late fil­ing?<em­phas­is role="strong"><link xlink:href="ht­tps://cms.law/en/nld/pub­lic­a­tion/cms-corona-leg­al-team-q-a#Shortter­m­re­liefandcoronas­chemes" xlink:show="none" xlink:title="">Short term re­lief and corona schemes</link></em­phas­is>Are there any ef­fect­ive (COV­ID-19) meas­ures in place in the Neth­er­lands that provide (short term) re­lief against cred­it­ors’ ac­tions?Does ap­ply­ing for in­solv­ency pro­ceed­ings have an (neg­at­ive) im­pact on any (short-term) COV­ID-19 com­pens­a­tion schemes offered by the Gov­ern­ment?<em­phas­is role="strong"><link xlink:href="ht­tps://cms.law/en/nld/pub­lic­a­tion/cms-corona-leg­al-team-q-a#Con­tinu­in­busi­ness" xlink:show="none" xlink:title="">Con­tinu­ation of busi­ness</link></em­phas­is>Are there any spe­cial rules ap­plic­able for con­tinu­ation of busi­ness in a fin­an­cially dis­tressed situ­ation in the Neth­er­lands?Can con­tracts be ter­min­ated dur­ing in­solv­ency pro­ceed­ings?<em­phas­is role="strong"><link xlink:href="ht­tps://cms.law/en/nld/pub­lic­a­tion/cms-corona-leg­al-team-q-a#Dir­ect­orsand­Share­hold­ers" xlink:show="none" xlink:title="">Dir­ect­ors and Share­hold­er­s' Li­ab­il­ity</link></em­phas­is>Can a dir­ect­or or par­ent com­pany be held li­able for the debt of an in­solv­ent com­pany in the Neth­er­lands?<em­phas­is role="strong"><link xlink:href="ht­tps://cms.law/en/nld/pub­lic­a­tion/cms-corona-leg­al-team-q-a#share­hold­erLS" xlink:show="none" xlink:title="">Share­hold­er­s' loans and se­cur­ity rights</link></em­phas­is>Are share­hold­ers’ loans treated dur­ing in­solv­ency pro­ceed­ings in a sim­il­ar way as loans provided by fin­an­cial in­sti­tu­tions in the Neth­er­lands?<em­phas­is role="strong"><link xlink:href="ht­tps://cms.law/en/nld/pub­lic­a­tion/cms-corona-leg­al-team-q-a#In­ter­na­tion­al" xlink:show="none" xlink:title="">In­ter­na­tion­al</link></em­phas­is>Do the in­solv­ency pro­ceed­ings in the Neth­er­lands have an uni­ver­sal ef­fect and are for­eign in­solv­ency pro­ceed­ings re­cog­nized in your jur­is­dic­tion? <em­phas­is role="strong">Ad­min­is­trat­ive Law</em­phas­is>What if I re­ceive an or­der sub­ject to pen­alty or an (oth­er) ad­min­is­trat­ive en­force­ment or­der whilst - be­cause of COV­ID-19 - it is dif­fi­cult or im­possible to com­ply with the or­der (on time)? Un­der Dutch law, a gen­er­al duty to en­force law by means of re­medi­al sanc­tions ap­plies.  A com­mon re­medi­al sanc­tion is an or­der sub­ject to pen­alty to re­medi­ate a vi­ol­a­tion with­in a spe­cif­ic peri­od of time (the com­pli­ance peri­od). Ex­cep­tions can be made in case of ex­traordin­ary cir­cum­stances.The Gen­er­al Ad­min­is­trat­ive Act of­fers the vi­ol­at­or the pos­sib­il­ity to re­quest the com­pet­ent au­thor­ity to ex­tend the com­pli­ance peri­od of a re­medi­al sanc­tion, so that pen­al­ties will (tem­por­ar­ily) not be in­curred. This can of­fer a good solu­tion if it is tem­por­ar­ily im­possible to com­ply with an or­der sub­ject to a pen­alty.Also, the vi­ol­at­or can re­quest the com­pet­ent au­thor­ity to com­pletely or partly with­draw the or­der. This pos­sib­il­ity mainly ap­plies to situ­ations of force ma­jeure. En­ter­prises could there­fore suc­cess­fully in­voke this pos­sib­il­ity dur­ing the COV­ID-19 crisis. For both solu­tions it is im­port­ant that the (tem­por­al) im­possib­il­ity to com­ply with the or­der is timely an­nounced to the com­pet­ent au­thor­ity. If the an­nounce­ment is made after the com­pli­ance peri­od has ex­pired, it will gen­er­ally be too late. Can an ad­min­is­trat­ive fine be re­duced or re­voked be­cause it was im­possible to com­ply with the law dur­ing the COV­ID-19 crisis? The Gen­er­al Ad­min­is­trat­ive Act de­term­ines that the com­pet­ent au­thor­ity can­not im­pose a fine if the vi­ol­at­or is not to blame. If an en­ter­prise can (tem­por­ar­ily) not com­ply with cer­tain reg­u­la­tions be­cause of COV­ID-19, it could state it is not to blame. Also, the prin­ciple of pro­por­tion­al­ity ap­plies to pub­lic en­force­ment. This means the com­pet­ent au­thor­ity has to con­sider the pro­por­tion­al­ity of en­force­ment in all spe­cif­ic cases. When does a situ­ation of ad­min­is­trat­ive force ma­jeure ex­ist and what should the ad­min­is­trat­ive au­thor­ity do in case of force ma­jeure? Ad­min­is­trat­ive force ma­jeure ex­ists in case a de­cision can­not be made due to ab­nor­mal and un­fore­seen cir­cum­stances, for which the ad­min­is­trat­ive au­thor­ity can­not be blamed and which are bey­ond the con­trol of the au­thor­ity. Ac­cord­ing to con­sist­ent case law, it is un­likely to be as­sumed that there is a case of force ma­jeure. This is also counts for ab­sence of pub­lic ser­vants due to sick­ness and ad­min­is­trat­ive or or­gan­isa­tion­al prob­lems. This is be­cause the ad­min­is­trat­ive au­thor­ity is con­sidered to be able to in­flu­ence these cir­cum­stances. However, we can ima­gine that the COV­ID-19 vir­us, and the meas­ures taken to com­bat the vir­us which have the whole so­ci­ety on lock­down, con­sti­tute a force ma­jeure situ­ation. If the ad­min­is­trat­ive au­thor­ity be­lieves there is a mat­ter of force ma­jeure, it has to no­ti­fy the ap­plic­ant as soon as pos­sible that the de­cision-mak­ing peri­od is sus­pen­ded, and it has to state the peri­od in which the ap­plic­ant can ex­pect a de­cision. If the au­thor­ity doesn’t make men­tion of the sus­pen­sion, the dead­line can­not be met and the ap­plic­ant can use the leg­al op­tions of no­tice of de­fault, in­cre­ment­al pen­alty and ap­plic­a­tion for ju­di­cial re­view, men­tioned be­low.What can the ap­plic­ant do in case the au­thor­ity ex­ceeds the de­cision-mak­ing term? If the ad­min­is­trat­ive au­thor­ity fails to reach a de­cision with­in the time lim­it, the ap­plic­ant can send them a writ­ten no­tice of de­fault. The ad­min­is­trat­ive au­thor­ity will then in­cur an in­cre­ment­al pen­alty pay­ment as of two weeks after the re­ceipt of the no­tice of de­fault, for every day the de­fault con­tin­ues. Fur­ther­more, the ap­plic­ant can ap­peal im­me­di­ately to the ad­min­is­trat­ive court. That way they can try to force the ad­min­is­trat­ive au­thor­ity (sub­ject to an in­cre­ment­al pen­alty pay­ment set by the judge) to make a de­cision as soon as pos­sible.<em­phas­is role="strong">Real Es­tat</em­phas­is><em­phas­is role="strong">e & </em­phas­is><em­phas­is role="strong">Con­struc­tion</em­phas­is>Can I, as a con­tract­or, in­voke a force ma­jeure clause, so that I have the right to be com­pensated for cost-in­creas­ing cir­cum­stances and/or my con­struc­tion time be­ing pro­longed? This en­tirely de­pends on the agree­ment between the parties and wheth­er the parties, for ex­ample, have put the UAV 2012, UAV-GC 2005 or FID­IC in­to ef­fect.Can I, as a cli­ent, ter­min­ate a con­tract in the event of the con­struc­tion time be­ing pro­longed or cost-in­creas­ing cir­cum­stances due to the corona-pan­dem­ic? This en­tirely de­pends on the agree­ment between the parties and wheth­er the parties, for ex­ample, have put the UAV 2012, UAV-GC 2005 or FID­IC in­to ef­fect.<em­phas­is role="strong">Real Es­tate - Im­pact on lease agree­ments</em­phas­is>Is a less­ee eli­gible for rent re­duc­tion due to a sig­ni­fic­ant de­cline in foot­fall and con­sequently its turnover as a res­ult of COV­ID-19? On the basis of Dutch case law, a de­cline in foot­fall and turnover as a res­ult of un­fore­seen cir­cum­stances, such as COV­ID-19 and the lock­down meas­ures, was/is com­monly con­sidered (naar ver­keer­sopvat­tin­gen) to be part of the en­tre­pren­eur­i­al risk of a less­ee and which do not con­sti­tute a de­fect (and there­fore can­not lead to a claim for rent re­duc­tion).Hav­ing said this, the COV­ID-19 situ­ation is un­pre­ced­en­ted in scope, im­pact and dur­a­tion and af­fects the com­munis opinio (de ver­keer­sopvat­tin­gen). One may ar­gue that the concept of gen­er­ally pre­vail­ing opin­ion (de ver­keer­sopvat­ting) changes in such way that the im­pact of COV­ID-19 crisis and the con­sequences of the guidelines on so­cial dis­tan­cing and gov­ern­ment­al lock­down meas­ures, are (no longer) an en­tre­pren­eur­i­al/com­mer­cial risk for less­ees only. The above­men­tioned Dutch case law may no longer ap­ply or not ap­ply in full.On the basis of the prin­ciples of reas­on­able­ness and fair­ness and the doc­trine of un­fore­seen cir­cum­stances, the lessor may be ob­liged to of­fer a rent re­duc­tion of rent­al pay­ments. The spe­cif­ic facts and cir­cum­stances of the case, such as the ca­pa­city of less­ee, type of lease and as­set play an im­port­ant role in de­term­in­ing if and to what ex­tent the less­ee is en­titled to a rent re­duc­tion.Is a less­ee eli­gible to tem­por­ar­ily close its leased space - on its own ini­ti­at­ive – and opt for rent re­duc­tion as a res­ult of COV­ID-19? As to the rent re­duc­tion, see our com­ments above.When clos­ing on its own ini­ti­at­ive (without an or­der by the Gov­ern­ment), it should be noted that most lease agree­ments in­clude an ob­lig­a­tion to op­er­ate and that con­sulta­tion with the lessor is ad­vis­able be­fore such clos­ing.Is a less­ee eli­gible for rent re­duc­tion in the event its leased space is closed fol­low­ing an or­der by the Gov­ern­ment as a res­ult of COV­ID-19? In ad­di­tion to our com­ments un­der 1, a gov­ern­ment­al or­der in con­nec­tion with COV­ID-19 may con­sti­tute force ma­jeure and may be one of the cir­cum­stances which can­not be brought for the sole risk of the less­ee (please be also re­ferred to the ques­tion about force ma­jeure be­low).Is there any (bind­ing) COV­ID-19 reg­u­la­tion ap­plic­able to com­mer­cial lease agree­ments? The Dutch gov­ern­ment has not ad­op­ted any (bind­ing) reg­u­la­tion at the mo­ment re­gard­ing com­mer­cial leases (yet). With re­gard to re­tail prop­er­ties, please be also re­ferred to the ques­tion be­low.Are there any guidelines/agree­ments ap­plic­able to re­tail prop­er­ties?  On 10 April 2020, sev­er­al rel­ev­ant mar­ket play­ers (As­so­ci­ation of In­sti­tu­tion­al Prop­erty In­vestors in the Neth­er­lands (IVBM), Neth­er­lands Banker­s' As­so­ci­ation (NVB) rep­res­ent­ing ABN AMRO, Deutsche Bank, ING and Ra­bobank, Min­istry of Eco­nom­ic Af­fairs and Cli­mate Policy (EZK) and mul­tiple re­tail sec­tor or­gan­iz­a­tions) is­sued a joint press re­lease. Pur­su­ant to this press re­lease, the parties agreed on guidelines/a “gen­tle­men’s agree­ment” which sup­port the re­tail mar­ket and cla­ri­fy how the rel­ev­ant mar­ket play­ers on the re­tail mar­ket should in­ter­act with each oth­er dur­ing the cur­rent COV­ID-19 crisis. The guidelines are not bind­ing. For de­tails we refer to www.ivba.nl/ac­tueel-artikel-de­tail/steun-akkoordCould a less­ee con­sider oth­er leg­al op­tions, such as a lease ter­min­a­tion, or oth­er op­tions as a res­ult of COV­ID-19? Save for spe­cif­ic con­trac­tu­al ar­range­ments and spe­cif­ic in­di­vidu­al cir­cum­stances, we be­lieve that ter­min­at­ing the lease is an up­hill battle for a less­ee.We see cur­rent mar­ket ini­ti­at­ives arise in which the lessors and less­ees jointly agree on (tem­por­ary) set­tle­ments or ad­just­ments re­gard­ing their lease agree­ments, such as rent­al pay­ments in ar­rears, par­tial rent re­duc­tions, ex­ten­sions of the pay­ment term and rent­al pay­ment ar­range­ments. However, mu­tu­al con­sent by both lessor and less­ee is re­quired.Does the out­break of COV­ID-19 jus­ti­fies in­vok­ing force ma­jeure by less­ee?  Most leases do not con­tain  a force ma­jeure clause. Usu­ally parties rely on the stat­utory pro­vi­sion re­gard­ing force ma­jeure are set out in the Dutch civil code.It de­pends very much on the spe­cif­ic lease cir­cum­stances of the case and the con­di­tions in the lease agree­ment, wheth­er there is a situ­ation of force ma­jeure.A gov­ern­ment­al or­der to close down in con­nec­tion with COV­ID-19, such as the tem­por­ary clos­ure of res­taur­ants or re­tail loc­a­tions, may un­der cir­cum­stances, may qual­i­fy as force ma­jeure.<em­phas­is role="strong">Comme</em­phas­is><em­phas­is role="strong">rcial</em­phas­is>Is COV­ID-19 a case of force ma­jeure? It is pos­sible that COV­ID-19 might lead to a force ma­jeure situ­ation. This could be the case, for ex­ample, if a com­pany is shut down by the gov­ern­ment or an event has to be can­celled be­cause of a pro­hib­i­tion. However, this also de­pends on pos­sible terms that have been agreed upon. Not every case can be con­sidered force ma­jeure. If it is still pos­sible to ful­fil the terms, wheth­er or not this is at high­er costs, then ini­tially this can­not be con­sidered a force ma­jeure situ­ation. It is im­port­ant to first con­sider the terms the parties in­volved agreed on.What ob­lig­a­tions do I have in a force ma­jeure situ­ation? Gen­er­ally, in this situ­ation a party is ob­lig­ated to lim­it po­ten­tial dam­age as much as pos­sible (in­clud­ing for the oth­er party). It is ad­vis­able to con­sult to­geth­er to reach a solu­tion. Fur­ther­more, it is im­port­ant to check pos­sible writ­ten terms in or­der to de­term­ine if there are any oth­er ob­lig­a­tions or con­sequences in case of force ma­jeure.Am I ob­lig­ated to ful­fil my con­trac­tu­al agree­ments in a force ma­jeure situ­ation? When a con­tract­or can­not ful­fil the agree­ments for the cli­ent due to force ma­jeure, the cli­ent can­not ex­pect the con­tract­or to ful­fil the agree­ments at that mo­ment. The cli­ent can how­ever ex­pect the party to po­ten­tially later ful­fil the terms, for ex­ample by de­liv­er­ing the goods and/or ser­vices at a dif­fer­ent point in time, when force ma­jeure is no longer the case. Should the con­tract­or no longer be cap­able to de­liv­er goods or ser­vices due to force ma­jeure, the cli­ent can post­pone the ob­lig­a­tion to pay. This again de­pends on the terms the parties agreed on.Do I owe com­pens­a­tion in case of non-per­form­ance due to force ma­jeure? In case of force ma­jeure, the oth­er party is not ini­tially owed any com­pens­a­tion. The agree­ments could how­ever con­tain dif­fer­ent terms.Am I li­able for a po­ten­tial con­trac­tu­al fine in case of non-per­form­ance due to force ma­jeure? Ini­tially, there is no case of li­ab­il­ity for con­trac­tu­al fines due to force ma­jeure. The agree­ments could how­ever con­tain dif­fer­ent terms.Can I al­ter the agree­ment be­cause of COV­ID-19? As a gen­er­al prin­ciple, the agree­ment can­not be uni­lat­er­ally altered, un­less the parties came to terms about this pri­or. Un­der un­fore­seen cir­cum­stances – which we be­lieve COV­ID-19 ini­tially is – parties can rene­go­ti­ate. Should parties be un­able to come to new terms, a party may ask the judge to al­ter the agree­ment. However, it is re­quired that con­tinu­ation of the agree­ments is un­ac­cept­able due to the un­fore­seen cir­cum­stances ac­cord­ing to rules of reas­on­able­ness and fair­ness. This will not typ­ic­ally be the case. Gen­er­ally, a judge will be hes­it­ant to al­ter agree­ments.<em­phas­is role="strong">Em­pl</em­phas­is><em­phas­is role="strong">oy­ment</em­phas­is>When is an em­ploy­er en­titled to a sub­sidy un­der the Tem­por­ary Emer­gency Meas­ure Bridging for Em­ploy­ment (NOW)?If you ex­pect a loss of turnover of at least 20% dur­ing three con­sec­ut­ive months in the peri­od from the 1st of March un­til the 31st of Ju­ly 2020. The em­ploy­er de­term­ines which three con­sec­ut­ive months are used for this cal­cu­la­tion:March, April, May; orApril, May, June; orMay, June, Ju­ly. Loss of turnover is cal­cu­lated by first de­term­in­ing the ‘ref­er­ence-turnover’. This is done by di­vid­ing the net-turnover of 2019 by 4. The ref­er­ence-turnover is com­pared with your es­tim­ate of the turnover over the three-month peri­od as de­scribed above. If the loss is high­er than 20%, you can ap­ply for the sub­sidy. If you are part of a group of com­pan­ies, dif­fer­ent rules ap­ply, we will be happy to as­sist you with that.The sub­sidy will be paid by the UWV in three in­stal­ments with­in 2 weeks after the ap­plic­a­tion. The sub­sidy is al­ways in­ten­ded to cov­er the wage bill for March, April and May 2020. This is a sep­ar­ate mat­ter from the meas­ure­ment peri­od chosen by you. How much sub­sidy do I re­ceive un­der the NOW? The sub­sidy is based on the wage bill (the ‘SV-loon’, the wage for the pur­poses of wage tax/na­tion­al in­sur­ance con­tri­bu­tions with a max­im­um of € 9,538 gross per in­di­vidu­al em­ploy­ee) for Janu­ary 2020. The amount of the sub­sidy de­pends on the per­cent­age of loss of turnover and is cal­cu­lated on the basis of the gradu­ated scale (100% loss of turnover leads to 90% sub­sidy over the wage bill). In the ap­plic­a­tion form the payroll tax num­ber is filled in on the basis of which the UWV de­term­ines the wage bill for your cal­cu­la­tion.Un­til when can I claim NOW?  Ap­plic­a­tions for the NOW sub­sidy can be sub­mit­ted up to and in­clud­ing 31 May 2020. Plans are be­ing made for an ex­ten­sion of the NOW after this date. In any case, it is clear that an ex­ten­sion will im­pose ad­di­tion­al con­di­tions on ob­tain­ing a sub­sidy. Ex­amples in­clude con­di­tions that lim­it the pay­ment of di­vidends and bo­nuses and the ob­lig­a­tion to make agree­ments with trade uni­ons/works coun­cils about con­tin­ued em­ploy­ment.Can I amend em­ploy­ment con­di­tions be­cause my em­ploy­ees do not (or can­not) work or be­cause my turnover is heav­ily de­creas­ing, wheth­er or not in com­bin­a­tion with the NOW sub­sidy? The amend­ment of em­ploy­ment con­di­tions is de­term­ined by the agree­ments in a col­lect­ive la­bour agree­ment, the ap­plic­able em­ploy­ment con­di­tions, sup­port from the works coun­cil and, above all, the con­sent of in­di­vidu­al em­ploy­ees. As of the start of the corona crisis, vari­ous em­ploy­ers have been able to make agree­ments that re­late to the (sus­pen­ded) tim­ing and pay­ment of bo­nuses, hol­i­day al­low­ance, salary in­dex­a­tion, part-time work when the work sup­ply is de­creas­ing, tak­ing leave, etc. It is im­port­ant to bear in mind that one of the con­di­tions for the NOW sub­sidy is to en­sure as much as pos­sible that the wage bill for March, April and May 2020 is kept at the same level as in Janu­ary 2020. A lower­ing of this wage bill will lead to an ob­lig­a­tion to re­pay­ment of part of the sub­sidy af­ter­wards. We will be happy to help you to en­sure that tem­por­ary amend­ments to em­ploy­ment con­di­tions do not af­fect the sub­sidy.In or­der to safe­guard the health and safety of em­ploy­ees as much as pos­sible, I want to pre­vent em­ploy­ees from un­in­ten­tion­ally in­fect­ing oth­ers with the coronavir­us. What kind of ques­tions can I ask about the health of my em­ploy­ees? Des­pite the po­ten­tially ma­jor health con­sequences of COV­ID-19, it is not al­lowed to ask em­ploy­ees wheth­er they have the vir­us, nor to have them tested and share the res­ults with you. You are also not al­lowed to meas­ure the tem­per­at­ure of em­ploy­ees your­self. Ac­cord­ing to the Dutch Data Pro­tec­tion Au­thor­ity (Autor­iteit Per­soonsgegevens (‘AP’)) an em­ploy­er may re­quire an em­ploy­ee to keep a close eye on his or her own health, es­pe­cially when the em­ploy­ee is not work­ing at home, in view of the spe­cial cir­cum­stances sur­round­ing COV­ID-19. Ac­cord­ing to the AP, this means that it may be an ap­pro­pri­ate meas­ure to have your em­ploy­ees mon­it­or their own tem­per­at­ure dur­ing work­ing hours. In prac­tice, we see that the GDPR and Corona in the work­place mainly lead to prac­tic­al ques­tions that can of­ten be well re­solved in co­oper­a­tion with the com­pany doc­tor. We are happy to share our ex­per­i­ences with you.<em­phas­is role="strong">In­sur­ance</em­phas­is>Do in­sur­ance policies provide cov­er for losses caused res­ult­ing from the cur­rent COV­ID-19 out­break? The out­break could af­fect the risk un­der sev­er­al in­sur­ance policies: li­ab­il­ity, travel, (mar­ine) cargo and busi­ness in­ter­rup­tion policies. Wheth­er such policies provide cov­er for loss re­lated to the COV­ID-19 out­break, de­pends on the policy con­di­tions. Rel­ev­ant is wheth­er a policy provides cov­er for loss res­ult­ing from a con­ta­gious dis­ease (or on the oth­er hand ex­cludes such loss). If the policy provides cov­er, the cal­cu­la­tion of loss be­comes rel­ev­ant and wheth­er e.g. all loss can be linked to one  and the same cause, event or oc­cur­rence.Wheth­er an in­sur­ance policy provides cov­er needs to be de­term­ined on a case by case basis.<em­phas­is role="strong">Cor­por­ate</em­phas­is>Is it pos­sible to hold a gen­er­al meet­ing fully di­git­ally?Gen­er­al meet­ingYes, on 24 April, the law which con­tains new tem­por­ary fa­cil­it­ies on hold­ing an­nu­al gen­er­al meet­ings be­cause of COV­ID-19 came in­to force.In the art­icle that you can find here, the re­quire­ments for such a fully di­git­ally held gen­er­al meet­ing are de­scribed.Re­gard­less of the pos­sib­il­it­ies that this law of­fers, please note that there are also oth­er op­tions for tak­ing res­ol­u­tions in the gen­er­al meet­ing in a flex­ible way.Al­tern­at­ive 1. Ex­er­cise the vot­ing rights through elec­tron­ic means of com­mu­nic­a­tionDutch law provides for the pos­sib­il­ity, that – if the art­icles of as­so­ci­ation al­low so – each share­hold­er, in per­son or rep­res­en­ted by a proxy- hold­er au­thor­ised in writ­ing, is au­thor­ised to at­tend the gen­er­al meet­ing, ad­dress the gen­er­al meet­ing and ex­er­cise vot­ing rights through elec­tron­ic means of com­mu­nic­a­tion.In this scen­ario, it is im­port­ant to real­ise that a phys­ic­al meet­ing is also to take place, in which in any event the chair­man of the meet­ing and (in prin­ciple) the man­aging dir­ect­ors and su­per­vis­ory dir­ect­ors (if any) are present.The share­hold­ers must be iden­ti­fi­able through the elec­tron­ic means of com­mu­nic­a­tion and must be able to dir­ectly ob­serve the pro­ceed­ings at the meet­ing and ex­er­cise the vot­ing rights. The art­icles of as­so­ci­ation may provide that it is re­quired that the share­hold­ers can par­ti­cip­ate in the de­lib­er­a­tion via elec­tron­ic means of com­mu­nic­a­tion.By or pur­su­ant to the art­icles of as­so­ci­ation, con­di­tions may be im­posed on the use of the elec­tron­ic means of com­mu­nic­a­tion. If these con­di­tions are set by vir­tue of the art­icles of as­so­ci­ation, they have to be an­nounced in the no­tice.The art­icles of as­so­ci­ation may provide that votes cast through elec­tron­ic means of com­mu­nic­a­tion pri­or to the gen­er­al meet­ing, but no earli­er than the thir­ti­eth day be­fore the meet­ing, are equated to votes cast at the time of the meet­ing.Al­tern­at­ive 2. Power of at­tor­neyDutch law states that each share­hold­er is au­thor­ised to grant a power of at­tor­ney to ex­er­cise his vot­ing rights in the gen­er­al meet­ing. The art­icles of as­so­ci­ation may lim­it this au­thor­ity. The au­thor­ity to be rep­res­en­ted by a law­yer, civil-law not­ary, as­signed civil-law not­ary, can­did­ate civil-law not­ary or ac­count­ant can­not be ex­cluded.If a share­hold­er wishes to at­tend the meet­ing by a proxy -hold­er au­thor­ised in writ­ing, the re­quire­ment of writ­ten form for the power of at­tor­ney will be met if the power of at­tor­ney has been re­cor­ded elec­tron­ic­ally.No­ticeIn both scen­ari­os, a phys­ic­al meet­ing is held whereby the rules re­gard­ing con­ven­ing the gen­er­al meet­ing are to be fol­lowed. No­tice of a gen­er­al meet­ing will be giv­en through let­ters, sent to the ad­dresses of the share­hold­ers as men­tioned in the share­hold­ers re­gister. Un­less the art­icles of as­so­ci­ation state oth­er­wise, with the con­sent of a share­hold­er, no­tice may be giv­en through a read­able and re­pro­du­cible elec­tron­ic form of com­mu­nic­a­tion to the ad­dress giv­en by him to the com­pany for the pur­poses of such com­mu­nic­a­tion. If the no­tice peri­od was short­er or if no no­tice was sent, no val­id res­ol­u­tions can be ad­op­ted, un­less all per­sons with meet­ing rights have con­sen­ted to the ad­op­tion of res­ol­u­tions and the man­aging dir­ect­ors and the su­per­vis­ory dir­ect­ors (if any) have been giv­en the op­por­tun­ity to ad­vise pri­or to the ad­op­tion of the res­ol­u­tions.Al­tern­at­ive 3. Res­ol­u­tions out­side of a meet­ingIf the group of share­hold­ers is not too big, it could be con­sidered to ad­opt res­ol­u­tions in writ­ing out­side a meet­ing, provided that all per­sons with meet­ing rights have con­sen­ted to this man­ner of ad­opt­ing res­ol­u­tions.Val­id res­ol­u­tionsIt is of the es­sence that the res­ol­u­tions are taken in ac­cord­ance with the art­icles of as­so­ci­ation. In any scen­ario, ma­jor­it­ies and quora are to be taken in­to ac­count and the man­aging dir­ect­ors and su­per­vis­ory dir­ect­ors (if any) have an ad­vis­ory vote pri­or to the ad­op­tion of the res­ol­u­tions.What are the dif­fer­ent ways for mem­bers of a co­oper­at­ive or an as­so­ci­ation to ad­opt res­ol­u­tions? Gen­er­ally, mem­ber meet­ings of a co­oper­at­ive or an as­so­ci­ation are held in the same way as meet­ings of a BV, like dis­cussed above.A dif­fer­ence is that a power of at­tor­ney to at­tend a gen­er­al meet­ing can only be gran­ted to any oth­er per­son with vot­ing rights, un­less the art­icles of as­so­ci­ation state oth­er­wise. The power of at­tor­ney can not be gran­ted to a third party. Fur­ther­more, a mem­ber can only per­son­ally at­tend a gen­er­al meet­ing by elec­tron­ic means of com­mu­nic­a­tion, a proxy-hold­er can­not do this.In ad­di­tion, a un­an­im­ous de­cision of all mem­bers or del­eg­ates, even if they are not con­vened in a meet­ing, provided that the man­age­ment board has know­ledge about the mat­ter, has the same ef­fect as a res­ol­u­tion of the gen­er­al meet­ing.<em­phas­is role="strong">Bank­ing & Fin­ance</em­phas­is>Which fin­an­cial short-term com­pens­a­tion schemes for im­me­di­ate losses due to COV­ID-19 have been im­ple­men­ted for en­tre­pren­eurs?The meas­ures now in place are the fol­low­ing:The SME guar­an­tee scheme (Borgstelling MKB Kredi­eten (BMKB)) has been ex­ten­ded (BMKB-C) This ex­ten­sion en­ables small and me­di­um en­ter­prises in the Neth­er­lands to at­tract ad­di­tion­al fin­an­cing. This scheme ap­plies to small and me­di­um en­ter­prises in the Neth­er­lands hav­ing less than EUR 50 mil­lion rev­en­ue; less than 250 em­ploy­ees (FT­Es); less than EUR 43 mil­lion bal­ance sheet total and that have been in­cor­por­ated for less than 3 years.The Busi­ness loan guar­an­tee scheme (Garantie On­derne­mersfin­an­ci­er­ing (GO)) has been ex­ten­ded This scheme al­lows the Dutch gov­ern­ment to guar­an­tee half of any new funds which banks make avail­able to Dutch bor­row­ers. The ex­ten­ded GO-scheme (GO-C) ap­plies to new Euro loans, in­clud­ing re­fin­an­cings, with a term of less than 8 years and to guar­an­tee fa­cil­it­ies. Ap­plic­ants must have sub­stan­tial busi­ness activ­it­ies in the Neth­er­lands. Cer­tain in­dus­tries are ex­cluded from the GO-scheme.The Surety­ship Ag­ri­cul­ture (Borgstelling­skrediet voor de Land­bouw (BL)) has been ex­ten­ded (BL-C) Ag­ri­cul­tur­al com­pan­ies are fa­cil­it­ated in or­der to at­tract fin­an­cings. The ex­ten­sion in­cludes bridge fin­an­cing un­der the ex­ist­ing scheme.In­terest re­bate for small en­tre­pren­eurs on mi­cro­cre­d­its "Qred­its" This meas­ure sup­ports mi­cro­cre­d­it pro­vider Qred­its with an amount of up to EUR 6 mil­lion to al­low Qred­its to ex­tend cred­its by up to six months and to al­low a de­crease of in­terest rates to 2%.Tem­por­ary Emer­gency Bridging Meas­ure for Sus­tained Em­ploy­ment (NOW, Nood­fonds Over­brug­ging Werkgele­gen­heid) This meas­ure provides fin­an­cial sup­port for em­ploy­ers to help them pay their em­ploy­ees' wages. The scope of this meas­ure is to sup­port em­ploy­ers that ex­pect to lose a sub­stan­tial part of their turnover (at least 20%) over a 3-months peri­od as a con­sequence of the Cov­id-19 crisis. In such case, em­ploy­ers may ap­ply at the Em­ploy­ee In­sur­ance Agency (UWV) for com­pens­a­tion of a max­im­um of 90% of em­ploy­ees’ wages, to be payed in ad­vance by the Em­ploy­ee In­sur­ance Agency. The com­pens­a­tion may also cov­er tem­por­ary staff’s wages. The sup­port can be ap­plied for 3 months and is re­lated to turnover losses from 1 March 2020 on­wards.Tem­por­ary ex­tra be­ne­fit for self-em­ployed pro­fes­sion­als (TOZO, Tijdelijke over­brug­ging­s­reg­eling zelf­standig on­derne­mers) This meas­ure eases the re­quire­ments for self-em­ployed pro­fes­sion­als to ap­ply for an ex­tra, tem­por­ary be­ne­fit. This sup­port can be ap­plied for as an ad­di­tion­al fin­an­cial sup­port for main­ten­ance and/or a loan for busi­ness cap­it­al. The TOZO meas­ure is based on the fin­an­cial sup­port for self-em­ployed pro­fes­sion­als (Be­sluit bijstand­verlen­ing zelf­standi­gen (Bbz)) and tem­por­ar­ily eases cer­tain terms and con­di­tions there­of.Pro­pos­al for com­pens­a­tion for en­tre­pren­eurs in Af­fected sec­tors COV­ID-19 (TOGS, Te­ge­mo­etko­m­ing On­derne­mers Get­ro­f­fen Sec­toren COV­ID-19) Un­der this meas­ure, the Dutch gov­ern­ment awards en­tre­pren­eurs in a num­ber of spe­cif­ic sec­tors who have been af­fected by the COV­ID-19 meas­ures a fixed re­im­burse­ment of €4,000.Post­pone­ment of phas­ing-out of the Growth Fa­cil­ity Scheme (GF) The in­ten­ded phas­ing-out of the Growth Fa­cil­ity Scheme will be ex­ten­ded by one year, un­til 1 Ju­ly 2021. This post­pone­ment en­sures that eli­gible en­tre­pren­eurs will be able to raise cap­it­al also in dur­ing the Cov­id-19 crisis. En­tre­pren­eurs in need of ven­ture cap­it­al may be­ne­fit from this sup­port­ing meas­ure. Un­der the Growth Fa­cil­ity Scheme the fin­an­cing of ven­ture cap­it­al is 50% guar­an­teed by the Dutch gov­ern­ment, for in­stance for losses in­curred on sub­or­din­ated loans and shares in fin­an­cial hold­ing com­pan­ies.Corona Bridging Loan (KKC) This fin­an­cial sup­port meas­ure be­ne­fits small en­ter­prises. The Dutch gov­ern­ment  will guar­an­tee 95% of bridging loans for a max­im­um amount of EUR 750 mil­lion. This scheme will be avail­able to small en­tre­pren­eurs with re­l­at­ively lim­ited fin­an­cing needs (EUR 10.000 to 50.000). Mi­cro-, small and me­di­um size en­ter­prises are eli­gible for this fin­an­cial sup­port provided that they have a rev­en­ue high­er than EUR 50.000 and were fin­an­cially healthy pri­or to the Cov­id-19 crisis. Also, qual­i­fy­ing en­ter­prises must have been re­gistered in the Neth­er­lands (Kamer van Koophan­del) pri­or to 1 Janu­ary 2019. The scheme has to be ap­proved by the European Com­mis­sion un­der the Tem­por­ary Frame­work for State aid meas­ures to sup­port the eco­nomy in the cur­rent Cov­id-19.Bridge fund­ing for star­tups and scale-ups (COL) Bridge fin­an­cing may also be ap­plied for by star­tups, scale-ups and oth­er in­nov­at­ive en­tre­pren­eurs af­fected by the Cov­id-19 crisis. These en­tre­pren­eurs usu­ally do not yet have bank­ing re­la­tion­ships. There­fore, the Dutch gov­ern­ment en­vis­ages that the re­gion­al de­vel­op­ment agen­cies will provide the an­nounced bridge fin­an­cings. The Dutch gov­ern­ment will start mak­ing avail­able EUR 100 mil­lion.Sus­pen­sion of re­pay­ment un­der the Proof-of-concept Fund­ing Scheme (Vroege Fase Fin­an­ci­er­ing, VFF) and the In­nov­a­tion Cred­it Scheme (In­nov­atiekrediet, IK) The Dutch gov­ern­ment grants fund­ing to in­nov­at­ive star­tups through the Proof-of-concept Fund­ing Scheme and the In­nov­a­tion Cred­it Scheme. If the eli­gible en­tre­pren­eurs are af­fected by the Cov­id-19 crisis, they may ap­ply for a sus­pen­sion of re­pay­ments and of in­terests for a peri­od of 6 months, from 1 April to 1 Oc­to­ber 2020. Un­der the Proof-of-concept Fund­ing Scheme, the in­terest re­pay­ment ob­lig­a­tions over these 6 months may also be sus­pen­ded.Ex­tra fin­an­cial sup­port for the cul­tur­al sec­tor The Dutch gov­ern­ment makes avail­able to the cul­tur­al sec­tor EUR 300 mil­lion ex­tra fin­an­cial sup­port in ad­di­tion to the oth­er avail­able fin­an­cial meas­ures. The scope of this ex­tra meas­ure is the sup­port of em­ploy­ment in the cul­tur­al sec­tor and en­sur­ing that cul­tur­al or­gan­isa­tions can keep in­vest­ing in the next cul­tur­al sea­son. The ex­tra fin­an­cial sup­port is par­tic­u­larly meant to sup­port cul­tur­al or­gan­isa­tions that are cru­cial to the whole sec­tor. If these or­gan­isa­tions will re­main fin­an­cially healthy, this will sus­tain the re­start of the busi­ness flow in this sec­tor, be­ne­fit­ting also self-em­ployed en­tre­pren­eurs.                           Morator­i­um on bank loans In ad­di­tion to the gov­ern­ment­al fin­an­cial sup­port meas­ures for en­tre­pren­eurs, dur­ing the COV­ID-19 crisis a num­ber of Dutch banks grants a 6-months sus­pen­sion of re­pay­ment of loans up to EUR 2,5 mil­lion to en­ter­prises that are ba­sic­ally fin­an­cially healthy. For in­stance, cli­ents of ABN AMRO, ING, Ra­bobank, Volks­bank and Tri­od­os Bank are be­ne­fit­ting from this meas­ure. In the mean­time, Dutch banks have sup­por­ted 105.000 en­tre­pren­eurs and more than 17.000 con­sumers in ad­di­tion to the gov­ern­ment­al sup­port meas­ures. Sus­pen­sions of pay­ment, new loans and/or ex­ten­ded cred­it fa­cil­it­ies presently amount to in total EUR 5,4 bil­lion. The agree­ment on sus­pen­sion of pay­ment of bank loans is only bind­ing on the com­mit­ted banks. However, fol­low­ing this fin­an­cial sup­port meas­ure by a num­ber of banks, un­der the COV­ID-19 cir­cum­stances the Dutch gov­ern­ment ex­pects also oth­er banks and fin­an­cial in­sti­tu­tions to act with le­ni­ency to­wards bor­row­ers.Com­mer­cial re­tail Agree­ment Ma­jor parties in the real es­tate sec­tor, Dutch banks and the Min­istry of Dutch Eco­nom­ic Af­fairs, have reached an agree­ment on sup­port­ing meas­ures for the com­mer­cial re­tail sec­tor. The scope of this Agree­ment is to sup­port the parties af­fected by the COV­ID-19 crisis in the sec­tor and to spread losses over less­ees, lessors, banks and the Dutch gov­ern­ment. The Agree­ment is bind­ing on the par­ti­cip­at­ing parties. However, fol­low­ing this Agree­ment, the Dutch gov­ern­ment ex­pects also oth­er lessors and less­ees to act with le­ni­ency and to reach fin­an­cial solu­tions in con­sulta­tion with each oth­er.Are there any ma­jor factors that may in­hib­it an ap­plic­ant from suc­cess­fully ap­ply­ing for a sta­bil­isa­tion meas­ure? Each sta­bil­isa­tion meas­ure presents the terms and con­di­tions un­der which ap­plic­a­tions can be sub­mit­ted, whereby the gen­er­ally ap­plic­able prin­ciple is that only com­pan­ies, branches and/or en­tit­ies in­cor­por­ated un­der Dutch law and re­gistered with the Dutch trade re­gister can suc­cess­fully ap­ply for a sta­bil­isa­tion meas­ure.<em­phas­is role="strong">In­solv­ency pro­ceed­ings</em­phas­is>What are the main in­solv­ency pro­ceed­ings for com­pan­ies in the Neth­er­lands?In the Neth­er­lands there are two main in­solv­ency pro­ceed­ings: sus­pen­sion of pay­ment (surséance van betal­ing) and bank­ruptcy (fail­lisse­ment). Whilst bank­ruptcy pro­ceed­ings primar­ily fo­cus on the li­quid­a­tion of the debt­or’s as­sets, the scope of a sus­pen­sion of pay­ment is the busi­ness con­tinu­ation. Sus­pen­sion of pay­ment pro­ceed­ings are in­ten­ded to give the debt­or tem­por­ary re­lief from claims of (only) the un­se­cured cred­it­ors. It is also in­ten­ded to en­able the debt­or to pro­pose a com­pos­i­tion to cred­it­ors. Both the sus­pen­sion of pay­ment and the bank­ruptcy are re­cog­nized as in­solv­ency pro­ceed­ings un­der the EC In­solv­ency Reg­u­la­tion.Sus­pen­sion of pay­ment A sus­pen­sion of pay­ment is a court-su­per­vised re­or­gan­iz­a­tion. Sus­pen­sion of pay­ment pro­ceed­ings es­sen­tially of­fer the debt­or two forms of re­lief: (i) a tem­por­ary morator­i­um for claims of un­se­cured cred­it­ors and (ii) the pos­sib­il­ity to im­ple­ment a re­struc­tur­ing plan with a ma­jor­ity con­sent of its cred­it­ors. Pref­er­en­tial and se­cured claims are ex­cluded from the sus­pen­sion of pay­ment pro­ceed­ings as these claims may be sep­ar­ately and in­de­pend­ently en­forced, dis­reg­ard­ing any sus­pen­sion of pay­ment pro­ceed­ings. However, prac­tice shows that it of­ten is dif­fi­cult to ef­fect­ively re­or­gan­ise and re­struc­ture through a sus­pen­sion of pay­ment due to vari­ous leg­al im­ped­i­ments un­der Dutch law. As a sus­pen­sion of pay­ment leaves the rights of se­cured and pref­er­en­tial cred­it­ors un­af­fected, these cred­it­ors should be pre­pared to con­sent to the re­struc­tur­ing on a vol­un­tar­ily basis. In ad­di­tion, it may also be dif­fi­cult to re­duce cur­rent busi­ness costs dur­ing sus­pen­sion of pay­ment pro­ceed­ings.Bank­ruptcy In con­trast to the sus­pen­sion of pay­ment, bank­ruptcy pro­ceed­ings aim to achieve a (form­al) li­quid­a­tion of the debt­or’s as­sets for the be­ne­fit of all cred­it­ors.Act on the con­firm­a­tion of private plans (Wet ho­mo­log­atie on­der­hands akkoord or WHOA) The le­gis­lat­ive pro­pos­al for the Act on the con­firm­a­tion of private plans (Wet ho­mo­log­atie on­der­hands akkoord or WHOA) was sub­mit­ted to Dutch par­lia­ment last year. Once ad­op­ted, it will in­tro­duce a leg­al basis ac­cord­ing to which tail­or-made (fin­an­cial) re­struc­tur­ing plans can be im­ple­men­ted out­side form­al in­solv­ency pro­ceed­ings. The WHOA provides for a fast and ef­fi­cient re­struc­tur­ing pro­ced­ure out­side form­al in­solv­ency, which in prin­ciple can be com­pleted with­in a mat­ter of months. The re­struc­tur­ing plan may bind (a se­lec­tion of) se­cured, un­se­cured and pref­er­en­tial cred­it­ors as well as share­hold­ers, while at the same time ad­equately pro­tect­ing the in­terests of any dis­sent­ing party.The WHOA en­ables both the debt­or and oth­er im­port­ant stake­hold­ers the op­por­tun­ity to – at an early stage and out­side the pub­lic do­main – avoid an un­con­trolled in­solv­ency and pre­serve the debt­or’s value. In ad­di­tion, the WHOA provides for a high level of deal cer­tainty as a res­ult of, amongst oth­ers, the vari­ous sup­port­ive meas­ures. It also of­fers flex­ib­il­ity on the con­tents of the re­struc­tur­ing plan and has the op­tion to be (auto­mat­ic­ally) re­cog­nized through­out the EU.It is ex­pec­ted that the fur­ther par­lia­ment­ary de­bate on this sub­mit­ted le­gis­la­tion will take place in week 24/2020. It has been ar­gued that the cir­cum­stances un­der COV­ID 19 epi­dem­ic would jus­ti­fy speed­ing-up these le­gis­lat­ive pro­ceed­ings.What are the form­al re­quire­ments to ap­ply for in­solv­ency pro­ceed­ings?Sus­pen­sion of pay­ment A debt­or can ap­ply for sus­pen­sion of pay­ment pro­ceed­ings if he en­vis­ages that he will not be able to pay his debts as they fall due. Sus­pen­sion of pay­ment can only be gran­ted by the court at re­quest of a debt­or and is dir­ectly gran­ted. The court ap­points an ad­min­is­trat­or and a su­per­vis­ory judge.Bank­ruptcyThe court may de­clare a bank­ruptcy on re­quest of the debt­or him­self or of one or more cred­it­ors. An im­port­ant con­di­tion for the court for de­clar­ing a party bank­rupt is that the debt­or has ceased to pay its debts. This is the case if the debt­or has left claims of more than one cred­it­ors un­paid. Claims of se­cured cred­it­ors may be ex­ecuted sep­ar­ately and out­side bank­ruptcy pro­ceed­ings. An im­port­ant ex­cep­tion to this rule is the court-ordered stay (cool­ing-off peri­od) that may be im­posed by the su­per­vis­ory-judge. Dur­ing this cool­ing-off peri­od, the rights of the se­cured and pref­er­en­tial cred­it­ors re­main frozen. Cred­it­ors, in­clud­ing se­cured and pref­er­en­tial cred­it­ors, are not al­lowed to en­force their rights dur­ing the cool­ing-off peri­od (un­less so au­thor­ized by the su­per­vis­ory-judge). The scope of a cool­ing-off peri­od is to al­low the bank­ruptcy trust­ee to as­sess the bank­rupt es­tate.What are the in­solv­ency ap­plic­a­tion dead­lines? If the debt­or files for bank­ruptcy him­self, the court will gen­er­ally de­cide on the ap­plic­a­tion with­in a week. If a cred­it­or files for bank­ruptcy, a court hear­ing will be sched­uled with­in a few weeks. The court will gen­er­ally de­cide on the day of the court hear­ing.Have the in­solv­ency rules and timelines been amended due to the COV­ID-19 crisis? The Dutch in­solv­ency rules have not been amended. However, due to the Cov­id-19 crisis, on 26 March 2020 the Dutch ad­min­is­tra­tion of justice has im­ple­men­ted a spe­cif­ic tem­por­ary reg­u­la­tion for in­solv­ency pro­ceed­ings. Un­der this tem­por­ary reg­u­la­tion, bank­ruptcy re­quests and re­quests for sus­pen­sion of pay­ment are be­ing handled mostly by cor­res­pond­ence and, if ne­ces­sary, by on­line (video) con­nec­tion. In as­sess­ing bank­ruptcy re­quests, the court takes in­to ac­count the im­port­ance of leg­al pro­tec­tion and ab­use pre­ven­tion. In judging a bank­ruptcy re­quest, the court will take in­to ac­count all rel­ev­ant cir­cum­stances of the case, in­clud­ing the Cov­id-19 pan­dem­ic crisis and the re­lated (eco­nom­ic) situ­ation.Is there a leg­al ob­lig­a­tion to file for bank­ruptcy; if so what are the con­sequences for late fil­ing? Un­der Dutch law there is no leg­al ob­lig­a­tion to file for bank­ruptcy. However, con­tinu­ation of the busi­ness can lead to per­son­al li­ab­il­ity of the com­pany dir­ect­ors, al­though this is an ex­cep­tion­al case as the com­pany it­self is li­able for not (prop­erly) ful­filling its ob­lig­a­tions. Please see also the an­swer un­der ‘Dir­ect­ors and Share­hold­er­s' Li­ab­il­ity’.<em­phas­is role="strong">Short term re­lief and corona schemes</em­phas­is>Are there any ef­fect­ive (COV­ID-19) meas­ures in place in the Neth­er­lands that provide (short term) re­lief against cred­it­ors’ ac­tions? In the Neth­er­lands, no spe­cif­ic meas­ures are in place that provide short term re­lief against cred­it­ors’ ac­tion due to the Cov­id-19 crisis. However, in the con­text of this crisis, the Dutch gov­ern­ment has im­ple­men­ted ex­tens­ive eco­nom­ic and fin­an­cial meas­ures to sup­port Dutch com­pan­ies to main­tain and/or in­crease their li­quid­ity level. Please see also the an­swer un­der ‘Which fin­an­cial short-term com­pens­a­tion schemes for im­me­di­ate losses due to COV­ID-19 have been im­ple­men­ted for en­tre­pren­eurs?‘.Does ap­ply­ing for in­solv­ency pro­ceed­ings have an (neg­at­ive) im­pact on any (short-term) COV­ID-19 com­pens­a­tion schemes offered by the Gov­ern­ment? One of the main Cov­id-19 meas­ures that has been in­tro­duced by the Dutch Gov­ern­ment is the Tem­por­ary Emer­gency Bridging Meas­ure for Sus­tained Em­ploy­ment (Tijdelijke Nood­maatre­gel Over­brug­ging voor Werkbe­houd NOW). This meas­ure provides for fin­an­cial sup­port for em­ploy­ers to help pay­ing their em­ploy­ees’ wages. De­pend­ing on the re­duc­tion of the turnover, em­ploy­ers can claim a com­pens­a­tion for their reg­u­lar salar­ies up to a max­im­um of 90% of wages. Sub­sidies will be can­celled and re­claimed if in­solv­ency pro­ceed­ings are be­ing star­ted be­fore the sub­sidy is defin­it­ively gran­ted. Pay­ment ex­ten­sions gran­ted by the Dutch Tax Au­thor­ity might also be can­celled in case of com­mence­ment of in­solv­ency pro­ceed­ings. Sus­pen­sion of pay­ment by banks will gen­er­ally only be gran­ted to ba­sic­ally fin­an­cially healthy bor­row­ers.<em­phas­is role="strong">Con­tinu­ation of busi­ness</em­phas­is>Are there any spe­cial rules ap­plic­able for con­tinu­ation of busi­ness in a fin­an­cially dis­tressed situ­ation in the Neth­er­lands? Dir­ect­ors can be held per­son­ally li­able for the com­pany’s ob­lig­a­tions if they al­low the debt­or to enter in­to an agree­ment whilst they know or reas­on­ably should have known that the debt­or would not (with­in a reas­on­able time) meet his ob­lig­a­tions arising from that agree­ment and that the con­tract­ing party would not have any re­course against the debt­or’s es­tate for the dam­ages in­curred. Pro­cur­ing or per­mit­ting that a debt­or will not ful­fill its stat­utory or con­trac­tu­al ob­lig­a­tion is a sep­ar­ate leg­al ground for dir­ect­ors’ li­ab­il­ity. A dir­ect­or could also be held li­able for se­lect­ively (non-)pay­ing of cer­tain cred­it­ors when either bank­ruptcy is un­avoid­able or the com­pany ceases its activ­it­ies. An ex­ample in this con­text may be pay­ment to a party that is af­fil­i­ated either to the debt­or or to its dir­ect­ors.Can con­tracts be ter­min­ated dur­ing in­solv­ency pro­ceed­ings? In prin­ciple ex­ist­ing con­tracts at the time of the com­mence­ment of in­solv­ency pro­ceed­ings are not af­fected by such pro­ceed­ings. However, a con­tract may provide that the start of pro­ceed­ings for in­solv­ency of one of the parties gives the oth­er party the right to ter­min­ate the con­tracts or ac­cel­er­ate oth­er rights. In ad­di­tion, spe­cial pro­vi­sions ap­ply for con­tracts that have not been fully per­formed by both the debt­or and the oth­er party. The oth­er party can then re­quest the in­solv­ency trust­ee to in­form him with­in reas­on­able time wheth­er the in­solv­ency trust­ee will ful­fill the ob­lig­a­tions un­der the con­tract. If the in­solv­ency trust­ee states that he will per­form un­der the con­tract, he is ob­liged to grant se­cur­ity for prop­er per­form­ance of the rel­ev­ant ob­lig­a­tions. Should the in­solv­ency trust­ee de­clare that he will not ful­fill the ob­lig­a­tions un­der the con­tract (or does not re­act timely), the in­solv­ency trust­ee loses his right to de­mand per­form­ance of the oth­er party’s ob­lig­a­tions. The Dutch Bank­ruptcy Act (Fail­lisse­ment­swet) con­tains some spe­cial pro­vi­sion re­gard­ing the ter­min­a­tion of cer­tain spe­cif­ic con­tracts (eg. lease and em­ploy­ment agree­ments).<em­phas­is role="strong">Dir­ect­ors and Share­hold­er­s' Li­ab­il­ity</em­phas­is>Can a dir­ect­or or par­ent com­pany be held li­able for the debt of an in­solv­ent com­pany in the Neth­er­lands? No, in gen­er­al only the debt­or is li­able for ful­filling its leg­al ob­lig­a­tions, un­less the dir­ect­or or share­hold­er con­trac­tu­ally gran­ted se­cur­ity for the per­form­ance of the debt­or’s ob­lig­a­tions. Dir­ect­ors’ per­son­al li­ab­il­ity is an ex­cep­tion on this gen­er­al rule and only ap­plies if dir­ect­ors did not prop­erly per­form their leg­al du­ties. A per­son that fac­tu­ally de­term­ined the debt­or’s policy as if he would have been a dir­ect­or can also be qual­i­fied as dir­ect­or. In ex­cep­tion­al situ­ations, also a share­hold­ers may be held li­able for dam­ages caused by tort and, for in­stance, by neg­lect­ing a duty of care.<em­phas­is role="strong">Share­hold­er­s' loans and se­cur­ity rights</em­phas­is>Are share­hold­ers’ loans treated dur­ing in­solv­ency pro­ceed­ings in a sim­il­ar way as loans provided by fin­an­cial in­sti­tu­tions in the Neth­er­lands?Loans provided by share­hold­ers are treated in a sim­il­ar way as loans provided by fin­an­cial in­sti­tu­tions un­less the loans is con­trac­tu­ally sub­or­din­ated to spe­cif­ic debts or to the cred­it­ors in gen­er­al. In ad­di­tion, se­cur­ity may be gran­ted to share­hold­ers as col­lat­er­al for the per­form­ance of ob­lig­a­tions. If a pay­ment is done or a new se­cur­ity right is gran­ted for the be­ne­fit of share­hold­ers with­in one year pri­or to the com­mence­ment of in­solv­ency pro­ceed­ings without any leg­al ob­lig­a­tion thereto, such pay­ment or se­cur­ity right may be chal­lenged by the bank­ruptcy trust­ee. Per­form­ance by the debt­or of a due ob­lig­a­tion may only be nul­li­fied if the in­solv­ency trust­ee proves that, at that mo­ment in time, the per­son that has be­ne­fit­ted from the per­form­ance of the ob­lig­a­tion knew that a bank­ruptcy re­quest in re­spect of that debt­or had already been sub­mit­ted or that per­form­ance of the ob­lig­a­tion in ques­tion is the res­ult of con­sulta­tions between debt­or and cred­it­or with the in­ten­tion to fa­vour that cred­it­or det­ri­ment­ally to the oth­er cred­it­ors.<em­phas­is role="strong">In­ter­na­tion­al</em­phas­is>Do in­solv­ency pro­ceed­ings in the Neth­er­lands have a uni­ver­sal ef­fect and are for­eign in­solv­ency pro­ceed­ings re­cog­nized in your jur­is­dic­tion? In­solv­ency pro­ceed­ings in the Neth­er­lands have a uni­ver­sal ef­fect. The Dutch in­solv­ency re­gime aims to be­ne­fit both do­mest­ic as for­eign cred­it­ors. The com­pet­ence of a Dutch in­solv­ency trust­ee in an­oth­er jur­is­dic­tion may be lim­ited by the re­spect­ive for­eign leg­al sys­tem. In the Dutch leg­al doc­trine the gen­er­al opin­ion pre­vails that the law of the coun­try which the in­solv­ency pro­ceed­ings are com­menced de­term­ines the leg­al con­sequences of that in­solv­ency. The re­cog­ni­tion and the ef­fect of for­eign in­solv­ency de­cisions are based on in­ter­na­tion­al treat­ies. In the ab­sence of such a treaty, for­eign in­solv­ency de­cisions are gen­er­ally re­cog­nized, provided that the com­pet­ence and the pro­ceed­ings of the court that has opened such in­solv­ency pro­ceed­ings are in line with in­ter­na­tion­ally ac­cep­ted leg­al stand­ards and that the de­cision is not in con­flict with Dutch pub­lic or­der and not in con­flict with a de­cision giv­en by a court in an­oth­er jur­is­dic­tions in the same mat­ter.
Key meas­ures to con­sider in op­tim­ising cash-flow man­age­ment dur­ing the...
Or­gan­isa­tions face much un­cer­tainty dur­ing the COV­ID-19 crisis, which makes man­aging the cash-flow very chal­len­ging. This in­fograph­ic provides sev­er­al key meas­ures to con­sider, as re­com­men­ded by our ex­perts.me­di­um
CMS Ex­pert Guide for Dir­ect­ors of Com­pan­ies

 

 

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19/05/2020
Im­pact of COV­ID-19 on M&A trans­ac­tions
12 May 2020
CMS Ex­pert Guide for Dir­ect­ors of Com­pan­ies
03 June 2020
Coronavir­us – European Com­mis­sion’s Over­view of State aid rules in the...
The Com­mis­sion has pub­lished its over­view, de­signed to re­call the State aid rules ap­plic­able to pub­lic fund­ing op­por­tun­it­ies in the land trans­port sec­tor dur­ing the COV­ID-19 out­break. First of all, the...
11/05/2020
Can the COV­ID-19 crisis be con­sidered as an un­fore­seen cir­cum­stance in...
27 April 2020
CMS Ex­pert Guide to Gov­ern­ment Sup­port for Em­ploy­ers and Work­ers
This ex­pert guide ex­plores the ways dif­fer­ent gov­ern­ments have at­temp­ted to al­le­vi­ate the stress the pan­dem­ic has im­posed on both em­ploy­ers and work­ers and en­sure busi­ness con­tinu­ity.
19 May 2020
COV­ID-19: European Com­mis­sion’s over­view of State rules and pub­lic ser­vice...
On 14 May 2020, the European Com­mis­sion pub­lished a work­ing pa­per on the in­ter­pret­a­tion of State aid and pub­lic ser­vice ob­lig­a­tions in the avi­ation sec­tor in the con­text of the COV­ID-19 crisis This...
27/04/2020
Neth­er­lands is­sues new tax meas­ures in re­sponse to COV­ID-19 crisis
22 April 2020
CMS Ex­pert Guide to COV­ID-19's Im­pact on IP Leg­al Tim­ings
As in all as­pects of busi­ness, COV­ID-19 is im­pact­ing the world of IP and the po­s­i­tion is con­stantly chan­ging. To help you pri­or­it­ise and plan, the Glob­al IP prac­tice at CMS has put to­geth­er an over­view of COV­ID-19's cur­rent im­pact on pro­ced­ur­al timetables be­fore courts, na­tion­al in­tel­lec­tu­al prop­erty of­fices and key in­ter­na­tion­al IP in­sti­tu­tions.
18 May 2020
Im­pact of COV­ID-19 on CBD food busi­nesses
The coronavir­us (“COV­ID-19”) pan­dem­ic has driv­en on­line con­sumer shop­ping in the well­being sec­tor in a bid to find products that will pro­tect against, and help man­age the symp­toms of, COV­ID-19. Food...
24/04/2020
Emer­gency le­gis­la­tion on hold­ing an­nu­al gen­er­al meet­ings dur­ing pan­dem­ic
17 April 2020
CMS Ex­pert Guide to Coronavir­us Re­lated Loan Morator­i­ums
This guide con­tains a brief but com­pre­hens­ive over­view of cred­it morator­i­ums for 30 coun­tries world­wide, col­lated with a view to help­ing our cli­ents nav­ig­ate through the vari­ous gov­ern­ment re­sponses, and which will be up­dated on a reg­u­lar basis.
18 May 2020
COV­ID-19: European Com­mis­sion au­thor­ises EUR 550 mil­lion Ger­man state-guar­an­teed...
At the end of April 2020, the European Com­mis­sion au­thor­ised a pub­lic loan guar­an­teed by the Ger­man State for an amount of EUR 550 mil­lion in fa­vour of Condor, a Ger­man charter com­pany, un­der the European...