Step-by-step guide to applying for WHOA

WHOA roadmap

Through the WHOA, businesses can make agreements with their creditors and have these approved by a judge. This WHOA roadmap outlines the steps of the process in general terms. The roadmap assumes a positive end result. In other words, the judge grants approval for the proposed debt settlement (homologation).

Bear in mind that there are costs involved if you want to use the WHOA. For example, you will need a solicitor and you will also have to pay court fees.

Useful information to know in advance

• If you see that you will soon be unable to pay your debts, you can use the WHOA.
• If in doubt whether you can use the WHOA, it is wise to seek advice from, for example, your accountant, a lawyer or the KVK Advice Team.
• You may do the preparation, offering and voting of the agreement yourself.
• If you need help with the process, you can ask the court, through a lawyer, to appoint a restructuring expert. The restructuring expert can prepare the agreement and initiate the process . The court appointing the restructuring expert will make adjustments if it finds that the restructuring expert is not performing their duties properly and can replace them in extreme cases.
• You (or your restructuring expert) will need a lawyer for the request for confirmation (=approval) of the agreement with the court. It is advisable to be assisted by a lawyer from the beginning.
• You (or your restructuring expert) will need a lawyer to apply for a cooling-off period. This is a period during which creditors are not allowed to take any actions. The cooling-off period is maximum 4 months with a possible extension of another 4 months.
• You may continue to operate your business during the WHOA process, even if you are getting help from a restructuring expert.

Step 1: Make a draft agreement

Record agreements in draft agreement (estimate: from 2 days to a maximum of 8 months).

• File a statement (in Dutch) free of charge with the court registry stating that you will start preparing an agreement. In this statement, you indicate whether you want public or closed proceedings. You can also request a cooling-off period in the statement.

There are 2 procedures:

1. A closed agreement procedure.
This takes place behind closed doors. Publicity can lead to reputational damage and loss of turnover, which reduces the chances of a settlement.

2. A public proceedure.
Public proceedings are published in the Insolvency Register.

• Consult with your creditors and lay down the agreements you make in a draft agreement.
• Divide your creditors and shareholders into different classes based on rights and the agreements you want to make with them.
• The agreement should include information on its value to creditors compared to the value left for them in bankruptcy. The content and design of the agreement must comply with the requirements of the WHOA for the content of the agreement.

Step 2: Submit draft agreement

Submit draft agreement to creditors (1 day):

• Make sure that your creditors and shareholders can examine the agreement no later than 8 days before the vote.

Step 3: Organise a vot

Organise a vote (8 days):

• Before putting the agreement to a vote, you can ask the court to review the agreement. A lawyer must submit a request for this; you cannot do this yourself.
• You decide how your creditors and shareholders vote. This can be done physically, in writing, or digitally.
• Creditors vote by class.
• They can only vote ‘Yes, agreed’ or ‘No, not agreed’.

Step 4: Share the result of the vote

Share report of vote (7 days):

• Within 7 days of the vote, prepare a report stating the outcome of the vote. Share this report directly with your creditors and shareholders.
• The report should include who voted, the amount of money creditors are owed and the result of the vote.

If all creditors agree, approval by a court is not necessary. You pay your creditors as agreed in the agreement. This then completes the WHOA process for you.

If not all creditors have agreed, you proceed to step 5.

Step 5: Submit homologation request

Lawyer submits homologation request to court (1 day, as soon as possible):

• A lawyer submits the homologation request to the court as soon as possible. You pay a court registry fee for this.
• You also submit the report to the registry. You may do this yourself, without a lawyer.
• After filing, the court will set a hearing date. That hearing is 8 to 14 days  after the application is filed.
• Approval by a court is possible if there is sufficient approval of the agreement in 1 class. For that, the consenting creditors must account for at least two-thirds of the debts in that class. If there is sufficient support in 1 class, the agreement applies to all classes.

Step 6: Objection period

Objection period (8 to 14 days):

• All creditors and shareholders entitled to vote can submit a written request to reject the homologation request to the court until the day of the hearing. In doing so, creditors can also state their reasons. For example, insufficient information, incorrect voting, or misclassification of classes.

Step 7: Agreement approved or rejected

The court makes a decision on the settlement as soon as possible after the hearing. This is usually within 5 working days after the hearing. Does the judge rule in favour of approval of the agreement? Then creditors who did not vote or did not consent are still bound by the agreement.

• Everyone must abide by the homologated agreement.
• Do you fail to honour the agreements in the settlement? Then you must compensate the damage suffered by your creditors, unless this cannot be blamed on you. Creditors can proceed to dissolve the WHOA agreement and seize it directly.
• You cannot appeal the court's decision.

The court can reject the request for approval of the agreement based on a general ground for rejection or an additional ground for rejection. An appeal against this ruling is not possible.