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Subordination of Shareholder Loans

The Netherlands

19/04/2011

For some time there has been a discussion in the Netherlands regarding the nature of a shareholder loan as compared to other claims of creditors against a subsidiary of such shareholder in the context of that subsidiary being declared bankrupt. Several legal authors have advocated that such loans (under certain conditions) should be subordinated, while others assert that such subordination is inconsistent with, inter alia, the principles of freedom of contract and equality amongst creditors as developed under Dutch law. In the described case, the District Court of Breda, the Netherlands, has ruled on the nature of a shareholder's loan in such a context.

See also the German version of the CMS Hasche Sigle update Banking & Finance: "Niederlande: Nachrangigkeit von Gesellschafterdarlehen".

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CMS_Restructuring_and_Insolvency_in_Europe_Newsletter_Spring 2011_edition_Marc_Orval
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