ACPRP will come into effect on the 1st of January 2021: Get a head start
Utrecht, October 2020
The Dutch Act on the Confirmation of Private Restructuring Plans (‘ACPRP’) will come into effect on the 1st of January 2021. A letter from the Dutch Ministry of Economic Affairs and Climate, which was published yesterday, revealed the starting date of the new Dutch law. Entrepreneurs that wish to use the ACPRP are advised to take actions at an early stage to get a head start. If a now constructed plan is made in accordance with the requirement set out in the law, there is a good opportunity the plan can be confirmed by a judge once the law comes into effect.
About the ACPRP
The ACPRP gives debtors, whose debt position puts the continuation of an otherwise viable business at risk, the option to restructure their debt position without a bankruptcy by making an offer to its creditors in a Restructuring Plan. The judge can homologate the Restructuring Plan. It is not required that all creditors agree with the Restructuring Plan. Creditors who voted against the Restructuring Plan can be overruled by the judge through the homologation, as long as the Restructuring Plan is in accordance with the requirements set out in the law. The law aims to provide debtors with a tool that can help them to prevent a bankruptcy, which is often beneficial to both the debtor as well as its creditors.
It takes time to form a ‘ACPRP-proof’ plan that has the possibility to be confirmed by a judge. The debtor will need to make a number of analyses and calculations to create a plan that has any chance of being accepted by creditors and/or confirmed by a judge. The company, for instance, will need to be valuated. Furthermore, it can be necessary to draw up different business cases and/or scenarios to assess the viability of the company after a confirmation plan. In order to prevent bankruptcy by using the ACPRP, it is vital to start gaining insights and advise at an early stage.
Beaufort and the ACPRP
Beaufort has kept a close eye on creation of the ACPRP. We know all that is to know about the law. If you have any questions about the law and/or about how Beaufort can assist you, feel free to contact us. In our view, the ACPRP is one of many ways to restructure a business and prevent a bankruptcy. In general, an organisation is advised to review all possible options.
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