Crediteurenakkoord
Creditors' Agreement
A creditors' agreement is an agreement between a debtor and its creditors under which the creditors consent to (partial) payment or other terms in settlement of the debts.
A creditors’ composition is a binding arrangement whereby the debtor submits a proposal to its creditors for the settlement of outstanding claims. Such a composition takes effect when a majority of the creditors consent and the court grants its homologation.
It is relevant because it offers an alternative to full liquidation in bankruptcy or suspension of payments, enabling both the debtor and the creditors to achieve a more favourable outcome than would be possible through a forced sale of assets.
In practice, a creditors’ composition is frequently employed in the event of impending bankruptcy to facilitate a restart and avert further claims.
“The entrepreneur submitted a composition with creditors to prevent bankruptcy and to continue operating his business.”
Related terms
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