On 24 November 2020, the Dutch Upper House approved the COVID-19 Amendment Act, which seeks to amend the Temporary Act COVID-19. The act will enter into force shortly, most likely on 1 January 2021 at the latest. The act is of a temporary nature, and will remain in effect until 1 February 2021. However, it can be extended by consecutive two months' periods.
The bill aims to protect companies, who would normally not have seen their continuity threatened but who have liquidity problems due to the corona crisis, from creditors taking strategic recourse actions and filing bankruptcy petitions to enforce payment. The act provides the debtor with the option to request the court to suspend an application for its bankruptcy by a creditor. This also results in a temporary stay of payments against that creditor. The bill also provides an option to suspend other recovery measures taken by creditors.
Joost Volkers wrote a concise note on the new Dutch rules on the suspension of bankruptcy requests and limitations on other recovery measures for companies experiencing financial difficulties as a consequence of the current pandemic. Relevant for companies in distress, as well as lenders and investors with an interest in the Netherlands.