Resolving Financial Distress: Informal Reorganization in The Netherlands as a Beacon for Policy Makers in the CIS and CEE/SEE Regions?

In: Review of Central and East European Law
Authors: Hans Kuijl and Jan Adriaanse
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Abstract

In times of economic decline, increased attention is devoted to companies in financial difficulties. Partly as a result of this basic fact, many countries are currently working (under pressure) to improve existing insolvency legislation. This seems to be largely fuelled—as is the case in The Netherlands—by a strong desire to prevent bankruptcies as much as possible.Statutory legislation aimed at the deferment (or remission) of debt payments is introduced or relaxed in order to provide a fresh start for insolvent companies. An alternative possibility—in the form of informal reorganization—seems often to have been overlooked by legislators. This type of reorganization, therefore, is the focal point in this article.As far as the stimulation of rescue operations is concerned, the authors conclude that legislators must particularly focus their attention on informal reorganization. The thought is that such a policy focus for (member states in) the EU may also be of relevance (in whole or in part) for countries in the CIS/CEE/SEE regions.

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