CPB: limit debtors’ rights to enable companies to recover from bankruptcy

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Government macro-economic think tank CPB is recommending that debtors’ rights in bankruptcy cases be limited in order to give companies a better chance of recovering, the Financieele Dagblad said on Monday.

At present only 2.5% of companies in the Netherlands unable to repay their debts go on to recover, compared to a rate of 10% in the US. In a paper published on Monday, the CPB said recent adjustments to the receivership laws were ineffective.

The CPB said that companies should request suspension from payments with debtors and receivers at an earlier stage before bankruptcy is declared. This means arrangements can then be made to repay the debt in stages.

In addition, debtors blocking a re-start of a company should be forced to cooperate, the CPB said.