With the introduction of the Wet Homologatie Onderhands Akkoord (WHOA), Dutch insolvency law has been given an important instrument to help companies with financial problems avoid bankruptcy. The judiciary has published a guideline for observers in proceedings based on the WHOA. This guideline was established by the Expert Group WHOA and the National Consultation on Professional Content Supervision (LOVT). But what does this role of observer entail, and what responsibilities does it entail? In this blog we discuss the key points from the guideline and how it supports practice.
What is an observer?
An observer is appointed by the court to monitor the creation of a WHOA agreement. Their primary task is to safeguard the interests of the joint creditors and to inform the court about relevant aspects of the agreement process. According to the guideline, established by the Expert Group WHOA and the LOVT, the aim is to clarify the task of the observer and to ensure consistency in practice.
Key aspects of the guideline
- Appointment and independence
The court appoints the observer and checks his availability and independence in advance. If doubts arise about the independence of the observer, the parties involved can request the court to appoint another observer. - Scope of the task
The guideline emphasises that the observer has a broad task, including providing an opinion on the agreement. If the observer has indications of irregularities, he must investigate whether bankruptcy might be better for the creditors and report this to the court. - Costs and budgeting
Observers must submit a budget proposal to the court at the start, including a time schedule and an hourly rate. Without certainty about payment, the observer may refuse to start work. - Confidentiality and communication
The observer’s work is confidential. At the same time, good communication with the court, creditors, shareholders and other stakeholders is essential. The observer may engage third parties, provided this is stated in the budget and the opinion. - Opinion
The observer’s opinion should provide insight into the most important aspects of the agreement, such as the voting and any grounds for refusal. For other requests, the observer should discuss relevant facts and legal qualifications.
Why is this guideline important?
The WHOA offers debtors and creditors a means to reach an agreement together. The observer plays a key role in ensuring fairness, transparency and legal certainty in this process. By following the guideline, observers can perform their tasks consistently and carefully, which contributes to a more efficient procedure and more confidence among all parties involved.
Want to know more?
Are you involved in a WHOA procedure and do you have questions about the role of the observer? Please contact us for legal advice and support.
