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The Singapore-based Asian Business Law Institute (ABLI) recently released its Guide on the Treatment of Insolvent Micro and Small Enterprises in Asia in conjunction with the International Insolvency Institute. The guide suggests policy recommendations for the design of an effective insolvency regime for such businesses in Asia, and features a unique tiered approach for Five Key Principles and Six Aspirational Principles. Download the Guide here to read more.
As co-chairs, we thank all of the members of ABI’s International Committee for their continued support and involvement with the committee during this pandemic-dominated year. We also extend a warm welcome to our new members and encourage you to reach out to us or International Committee Membership Chair Kenneth Kraft (Dentons Canada; Toronto) to discuss ways to get more involved with the International Committee.
On Jan. 1, 2021, the Dutch Act on the Confirmation of Private Plans (hereafter referred to by its Dutch acronym, “WHOA,” or the “Dutch Scheme”) entered into force. It represents a robust and flexible restructuring framework. This brief article provides a summary of the Dutch Scheme and an update about the first published cases involving the scheme.
Dutch Scheme Inspired by U.S. Chapter 11 Reorganization Plan
The COVID-19 crisis has encouraged many countries to amend their bankruptcy laws. In many cases, these amendments took place temporarily — especially during the hibernation phase of the pandemic. In other countries, however, the pandemic has led to permanent changes in their insolvency legislations. More importantly, the COVID-19 crisis has encouraged many countries around the world to reassess the desirability of their insolvency and restructuring frameworks.
In recent times, global businesses based all over the world have often turned to chapter 11 or the English scheme of arrangement to implement their debt restructurings, often due to the failure of local restructuring and insolvency laws to provide an adequate or optimal restructuring solution. This has led to the development of “restructuring hubs” or “nodal” jurisdictions, and forum-selection has become a necessary part of devising a restructuring strategy in many cross-border situations in order to deliver the best outcome.
The term “silver lining” comes from Milton’s Comus, in which the silver lining is the light of the moon shining behind a cloud.[2] It is very difficult to find a silver lining in the COVID-19 pandemic, which has caused more than 500,000 deaths in the U.S. and 2.4 million deaths worldwide.[3] There have been some positives in how people have come together to address the crisis, and to adapt and adjust to the conditions created by the crisis.
In Canadian proceedings, it had previously been common for assets of the debtor to be conveyed to a purchaser through the granting of a vesting order. Normally, the court supervising the relevant insolvency proceeding in approving the transaction would issue an order that title to the purchased assets would vest in the purchaser “free and clear” of the claims of the vendors’ creditors. Instead, the purchase price proceeds would stand in place of the purchased assets.
