Last Updated March 06, 2019

Law and Practice

Authors



Florent (Amsterdam - HQ) was launched in 2017 by partners from BLIX and Höcker Advocaten, and now consists of about 35 lawyers. It has a strong focus on corporate/M&A, commercial and corporate litigation, banking and finance, and insolvency and restructuring. The firm employs real estate, employment and intellectual property experts in support of its focus areas, so is able to assist clients throughout a company’s life cycle, from start-up to investment round, from acquisition to litigation, and from financial distress to exit. The Insolvency team is appointed by the courts as bankruptcy trustees or administrators in the largest bankruptcies in the Netherlands. It also advises companies in distress, lenders, borrowers and financial institutions, as well as other creditors and counterparties, on all aspects of debt recovery, restructuring and insolvency. In addition to the team’s strong roots in domestic practice, the firm has excellent capabilities for and experience in dealing with cross-border/international and complex cases (including INSOL Fellows). Florent is the only major firm in the Netherlands with a substantial asset recovery practice, so can assist with cross-border asset recovery, fraud litigation (prosecuting civil claims for fraud) and financial fraud investigations.

Period leading up to suspension of payments/bankruptcy

When a company is in financial distress or even considering filing for bankruptcy or suspension of payments, it will typically involve qualified legal counsel to advise on how best to proceed and avoid liabilities, and if need be, to draft and file the petition for suspension of payments or bankruptcy. Costs incurred by an attorney in order to file for bankruptcy have preferential treatment in the bankruptcy of the company. Generally, lawyers will ask for a retainer in such situations in order to ensure that their fees are paid.

In certain cases, interim management (such as a chief restructuring officer) is appointed in the period prior to the insolvency of a company. This is usually instigated by the company’s (senior) lenders.

During suspension of payments

Since the debtor still has the capacity to act on its own behalf during suspension of payments, albeit in co-operation with, or with the authorisation of, the administrator, it is up to the company to decide which professionals to employ, taking into account that the administrator will have to approve their appointment. This could, for example, be a restructuring officer, financial adviser or other consultant.

During bankruptcy

After bankruptcy has been declared, it is not typical for a bankruptcy trustee to employ any (outside) legal counsel, as in the Netherlands a bankruptcy trustee is typically a lawyer who is part of a law firm. If the estate is a party to legal proceedings where representation by a lawyer is required, the estate will normally employ legal counsel from the bankruptcy trustee’s law firm to act on behalf of the estate in such proceedings. The approval of the supervisory judge is required for the bankrupt estate to be a party to legal proceedings.

Depending on the size of the bankruptcy, the bankruptcy trustee may employ forensic accountants and/or other financial specialists to assist in an investigation of the causes of the bankruptcy, mainly from a financial point of view. As such parties are employed by the estate, the costs associated with employing such parties will be estate costs. In large bankruptcies, an advisory firm may be employed by the estate to assist the bankruptcy trustee with the valuation of the assets of the company and with the more practical matters related to the bankruptcy. In addition, IT experts may be employed by a bankruptcy trustee in order to secure and preserve digital data. The costs associated with employing such a party will also be estate costs.

Other parties that wish to employ professional advisers will have to bear their own costs, as there is no mechanism under Dutch law that obliges the (bankrupt) company to pay or reimburse such professionals’ compensation.

Florent

NoMA House
Gustav Mahlerlaan 1236
1081 LA AMSTERDAM

+31 (0)20 303 59 00

+31 (0)20 303 59 99

info@florent.nl www.florent.nl
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Authors



Florent (Amsterdam - HQ) was launched in 2017 by partners from BLIX and Höcker Advocaten, and now consists of about 35 lawyers. It has a strong focus on corporate/M&A, commercial and corporate litigation, banking and finance, and insolvency and restructuring. The firm employs real estate, employment and intellectual property experts in support of its focus areas, so is able to assist clients throughout a company’s life cycle, from start-up to investment round, from acquisition to litigation, and from financial distress to exit. The Insolvency team is appointed by the courts as bankruptcy trustees or administrators in the largest bankruptcies in the Netherlands. It also advises companies in distress, lenders, borrowers and financial institutions, as well as other creditors and counterparties, on all aspects of debt recovery, restructuring and insolvency. In addition to the team’s strong roots in domestic practice, the firm has excellent capabilities for and experience in dealing with cross-border/international and complex cases (including INSOL Fellows). Florent is the only major firm in the Netherlands with a substantial asset recovery practice, so can assist with cross-border asset recovery, fraud litigation (prosecuting civil claims for fraud) and financial fraud investigations.

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