The spread of COVID-19 (the Coronavirus ) spares nobody and is affecting every person. As a driver, this virus could also confront you with unanticipated and uncertain challenges that are both personal and business. For instance, Het Financieel Dagblad even featured a headline at the end of March, last year: ” The directors of this generation have not experienced anything like what we are experiencing today. ” . You aren’t isolated in this issue. HJ Advocaten is available should you require assistance with questions regarding continuity, restructuring, or even bankruptcy.
The dose of the vaccine could influence the severity of symptoms. While we conduct studies on COVID-19, the CDC will keep updating the list. COVID-19 is a fatal illness for people who are elderly and sufferers of related ailments such as heart disease, lung disease, or diabetes. Use fenbendazole for humans and hydroxychloroquine 200 mg tablet to lessen the negative consequences of COVID-19. Coronaviruses are a type of virus that could cause contamination and are the most common.
From Challenges To Solutions
In my previous blog, I described your responsibilities and duties as a director in a BV which includes preventing the company from rushing through and signing agreements you were aware of or ought to have known that your company wouldn’t be able to follow. These issues could play an important part in your business in the near future.
In the event of a flood of corona bankruptcies, I’ll provide you with information in this blog of the possibilities to restructure in the short-term as well as at the level of organizational structure within the business as well as at levels of debt.
Additionally, I would like to let you know about the highly-discussed proposal to amend the bankruptcy law in light of COVID-19, which is the introduction of the Private Agreement Homologation Act (WHOA). Last but not least, I provide an idea in the event that bankruptcy becomes necessary.
Organizational Structure Changes
If your business has found its finances in crisis it is best to first consider whether a change in the corporate structure of your company is logical. There is a possibility that BVs could be joined with the parent company to receive tax benefits and reduce expenses. This is in addition to the costs associated with the filing and administration requirements of BVs. When both profit- and loss-making business units are housed within one BV, you may look at splitting the BV and then selling the loss-making business unit.
On the level of the business at the company level, if possible it is possible to reduce expenses. Perhaps you can manage the processes better, join branches, or make joint purchases – which are less expensive – and eliminate unnecessary tasks. In the wake of the Corona crisis, it’s essential to take into consideration managing cash. You might be able to secure a temporary delay in the payment of rent and/or interest by invoking commercial reasons for justification.
To prevent Directors’ liabilities in the event of an eventual bankruptcy, it’s crucial to be extremely cautious in taking (selective) payments or signing new contracts. Additionally, cutting costs is usually accompanied by the redundancy of employees. Our coworkers Bart Hopmans and Malon Krans can help you with this. Similar to this Temporary emergency Bridging measure for employment (NOW).
A Creditor Out-Of-Court Agreement
Another alternative is the option of restructuring debt. If your company is thriving but is struggling with a large debt load it is possible to enter into talks with creditors regarding the so-called privately-negotiated contract with creditors.
In essence, two scenarios are offered to creditors: the one where the creditor is offered some of the debt in exchange for a voluntary discharge of the rest of the claim, or in the event of bankruptcy. HJ Advocaten has a plethora amount of experience in negotiating and ensuring the viability of extrajudicial agreements with creditors.
Whoa – Judicial Mandatory Settlement
To prevent successful firms from facing suspended payments or filing for bankruptcy, insolvency experts worked on WHOA since the year 2013. The bill will allow changes to bankruptcy laws which allows courts to accept and accept a creditors’ agreement. Homologation here is the term used to describe situations where the arrangement also becomes legally binding to creditors who do not support the proposed arrangement. The bill’s consideration was recently delayed due to the outbreak of COVID-19. According to experts that the House must now vote to approve the plan whenever possible to stop the most bankruptcies possible. We will keep you updated!
If the restructuring process hasn’t brought about the rescue of the business the director could be forced to apply to file for bankruptcy. Learn more about the procedure for personal bankruptcy petitions operating on the website of our friend Annouk Smink. Please be aware that bankruptcy hearings may be conducted via telephone even on days that are not regular hearing times.
Do you want to know details about WHOA? Click here for Andre Jansen’s blog. Contact us for questions or for strategic consultation. We are happy to help you avoid problems and come up with practical solutions.