Options insolvency creditors

Insolvency is always bad news, both for the owner of a business who in many cases has struggled to the bitter end to turn the situation around and for his suppliers who are unlikely to see the money they are owed.

A trustee in insolvency (known in Dutch as a ‘curator’) generally starts by getting the affairs of the business into order. With bills that cannot be paid and insurance policies, employment contracts and tenancy agreements still running, a trustee needs to sort out a great many practical matters quickly. Immediately after a declaration of insolvency has been pronounced, a trustee often has little time for anything else. As a creditor you may simply have to wait your turn after submitting your outstanding debt claim to the trustee, but this is not always the case. If you have supplied any goods subject to retention of title, demand their return immediately. Ideally, you should collect them before insolvency is declared! It helps if it is clear who supplied the goods. If you supply the same goods to a customer more than once, it will improve your position if you ensure you can prove which goods were supplied when. For example by placing a sticker with an order number or date on the product’s packaging.

In many cases, a trustee can do little for a creditor other than communicate bad news. However, there are exceptions. Times when a creditor benefits from a trustee acting, or refraining from acting, in a

particular way. For example, issuing proceedings or complying with a supply obligation. Another situation where this would apply is where someone has given a guarantee for the payment of rent; that person will benefit if the trustee terminates the tenancy agreement immediately after insolvency is declared. A landlord could also benefit from termination, for example if he has found a new tenant who wants to occupy the premises immediately. A trustee’s inaction can also have a significant effect, such as where he fails to make a liability claim against a director who can be proven to have deliberately disadvantaged a supplier.

Of course, your first course of action will be to discuss the situation with the trustee, but if that doesn’t produce results it is not the end of the matter. A creditor in an insolvency can apply to the supervisory judge for an order requiring a trustee to take or refrain from taking a particular action. Under Article 69 of the Dutch Insolvency Act, the supervisory judge must issue a decision within 3 days. Unlike the majority of court proceedings, such an application is swift and involves few formalities.

Trustees sometimes apply for and obtain consent from the supervisory judge in advance of taking a particular action. This required by law in some cases, such as where the trustee terminates an employment contract. Where this occurs, under Article 67 of the Insolvency Act the party affected can appeal against the supervisory judge’s decision within five days; after that, the consent is irrevocable.

If you get the feeling that the trustee is unnecessarily disadvantaging you, call your lawyer for advice. For more information, you can contact us without any obligation. Use our “Ask a question for free” contact form or give us a call.