A MORATORIUM OF PAYMENT IN ARUBA AND THE NETHERLANDS ANTILLES
Temporary relief
The objective of a moratorium (‘suspension of payment’) is reorganization. In many cases, however, it is the first step towards bankruptcy. The most important benefit of a moratorium is that the debtor is given temporary relief against pressing creditors in order to reorganize and continue in business and ultimately to satisfy creditors’ claims.
The nature of a Netherlands Antilles’ and Aruban moratorium differs substantially from a moratorium under US law (Chapter 11) and does, for example, not cause pending proceedings to be stayed. Ensuring that all creditors are satisfied is the primary aim of a moratorium and not as under Chapter 11 to give the individual debtor a ‘fresh start’ by way of a general discharge of debts.
Both the Netherlands Antilles and Aruban Bankruptcy Ordinance contain a provision allowing any creditor to request the Court to end the moratorium, if (a) the estate (i.e. the financial position of the debtor) renders continuation of the moratorium undesirable, or (b) if the debtor has jeopardized or tried to jeopardize the interests of the creditors. Continuation of the moratorium is undesirable if the financial position of the debtor allows it to meet all its obligations.
Karel Frielink
Attorney (Lawyer) / Partner
