WHOA
The WHOA is the Act on the Homologation of Out-of-Court Arrangements, which enables companies in financial difficulties to conclude a binding agreement with their creditors outside of bankruptcy proceedings.
The WHOA, which has been in force since 2021, forms an important part of the modernisation of Dutch insolvency law. It enables a debtor to submit a restructuring proposal to its creditors which, upon confirmation by the court, becomes binding on all parties involved, including those who have not consented.
This scheme is relevant because it affords companies the opportunity to avoid bankruptcy and preserve the continuity of the enterprise, while creditors often receive a higher distribution than they would in a bankruptcy scenario. The procedure is relatively swift and flexible, with scope for class formation and voting mechanisms.
In practice, the WHOA is regularly invoked in medium-sized and larger enterprises that can secure the support of a majority of their creditors, following which the court may confirm the plan provided the statutory conditions are met.
“The company decided to commence WHOA proceedings in order to reach an agreement with its creditors and avoid bankruptcy.”
Related terms
Need legal advice?
Schedule a free consultation with one of our specialists