THE TERMINATION OF A MORATORIUM AS THE RESULT OF A COMPOSITION UNDER THE LAWS OF THE NETHERLANDS ANTILLES AND ARUBA
The composition must be adopted by the creditors and be approved by the court
Under Netherlands Antilles and Aruban law, a moratorium of payment (‘surséance van betaling’) is a legal concept distinct and separate from bankruptcy (‘faillissement’). The Bankruptcy Ordinance (‘Faillissementsbesluit’) provides for two types of proceedings: bankruptcy in which the debtor’s assets are liquidated to pay creditor’s claims, and suspension of payments (moratorium) whereby the debtor is given temporary relief against pressing creditors in order to reorganize and continue in business and ultimately to satisfy creditors’ claims.
The moratorium can be terminated by adoption of a so-called composition; adoption of a composition requires the consent of two-thirds of the creditors, representing at least three-fourths of the aggregate amount of the claims filed with the trustee. Pursuant to section 265 of the Bankruptcy Ordinance, a moratorium terminates as soon as the judgment approving of the composition is no longer subject to appeal.
The granting of a moratorium and the subsequent termination thereof on the grounds of an adopted and approved composition does not in itself cause the bankruptcy of the company which was the subject of such moratorium nor does it require such company to be declared bankrupt immediately or with the passage of time.
However, if such Company would not comply with the terms of the composition, each creditor could request the bankruptcy court to rescind the composition. If such request is granted, the bankruptcy court will declare the Company bankrupt.
Karel Frielink
Curacao-based Attorney (lawyer) / Partner
