Reinier Russell

managing partner

Reinier advises national and international companies
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Esmée Bootsman


Esmée advises on corporate law, contracts and corporate litigation.
+31 20 301 55 55

What does the Homologation Act (WHOA) mean for creditors?

Publication date 27 September 2023

The WHOA makes it easier for a company facing bankruptcy to avoid bankruptcy. This can be done through a binding agreement with all creditors, even if they do not all agree to the arrangement. What rights do creditors have in WHOA proceedings?


The Act on homologation of private restructuring arrangements (Wet homologatie onderhands akkoord; WHOA) makes it easier for companies to restructure if they face bankruptcy.

What is the purpose of the WHOA?

The purpose of the WHOA is to restore the assets of viable companies in dire straits and avoid bankruptcy. It is about the continuity of a company and preserving its value. A company can offer its creditors and shareholders – or part of them – an arrangement under the WHOA that provides for a change in their rights. In practice, this will usually mean that the company will still only pay part of its debts.

Once homologated by the court, the arrangement is binding on all creditors and/or shareholders whose rights are modified under the arrangement. If certain conditions are met, the arrangement can be imposed on creditors who have not consented. Hence the term ‘forced arrangement’.

What are the steps in the WHOA process?

A WHOA process has seven steps, these will be briefly explained in the following.

1.    Start

To start proceedings, the distressed company can file a start-up statement with the court. This statement gives access to provisions that can help the company reach an agreement, such as a cooling-off period. However, this statement is not mandatory. The court can also be involved later in the process.

2.    Preparation of the agreement

This step involves identifying the company’s financial position. The company can then consult with its shareholders and creditors and investigate whether an arrangement is feasible.

3.    Draft arrangement

After consultation, a draft arrangement should be drawn up. It will set out the arrangements made with the shareholders and creditors of the company. In addition, the creditors and shareholders are divided into classes of similar creditors. The company is not obliged to offer an arrangement to all its creditors; it is possible to include just some of them. The draft arrangement must be provided to creditors and shareholders at least 8 days before the vote.

4.    Vote

Creditors and shareholders vote by class. This can be either an electronic or written meeting/vote. A class is deemed to vote in favour if at least the representatives of 2/3rds of the total amount of claims in that class vote in favour.

5.    Submission of homologation request

If at least one class votes in favour, homologation of the arrangement by the court is possible. The court then determines the date on which the homologation petition will be heard. Creditors and shareholders must be notified in writing by the company.

6.    Objection

Creditors can file objections until the day of the hearing. The court hears the objections and decides whether homologation can be granted.

7.    Implementation of the agreement

If the court homologates the arrangement, it must be implemented by the creditors.

When will a WHOA arrangement be homologated?

In the WHOA process, the distressed company has a lot of freedom. It chooses which debtors to include in the process and can organise the voting procedure itself. The homologated arrangement can in principle not be appealed, thus avoiding lengthy legal proceedings and allowing the company to complete the process efficiently and quickly. The court has only a limited role in the WHOA process.

An agreement is only eligible for homologation by the court if the requirements are met.  One of the conditions is that the creditors and/or shareholders have been given the opportunity to express their opinion on the arrangement by vote. In addition, a forced arrangement will only be pronounced if it is justified in the circumstances.

This is why a number of grounds for rejection apply that can only be invoked by the creditors who voted against the arrangement. The grounds for rejection ensure that the arrangement is reasonable. For example, the court can reject the request if it appears that the applicant creditor is worse off under the arrangement than if the estate were liquidated in bankruptcy. In addition, SMEs should receive at least 20% of their claims.

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