MORATORIUM OF PAYMENTS IN THE DUTCH CARIBBEAN (I)
An opportunity to recover
Many companies face financial difficulties. Sometimes bankruptcy is the only option. The goal of the bankruptcy is the liquidation of the assets of the company and not to save the business, and this procedure is, therefore, not always the best procedure for realizing the full value of the company as a going concern.
Under the laws of the Netherlands Antilles, a temporary suspension or moratorium of payments (‘surséance van betaling’) is a general suspension of a debtor’s obligations ordered by the court. Only the debtor himself may request a moratorium, on the grounds that he is unable to continue payments.
The purpose of such a moratorium is to avoid the bankruptcy of the debtor which is in the interest of both the debtor and his creditors. A moratorium gives the debtor an opportunity to recover. It may lead to a normal resumption of payments or to a settlement. In many cases, however, a moratorium is followed by bankruptcy.
During the moratorium, unsecured creditors cannot enforce their rights. However, secured creditors can exercise their rights despite the moratorium.
The moratorium trustee or administrator in the moratorium (‘bewindvoerder‘) has less powers than a liquidator in a bankruptcy. The administrator may only act with the cooperation of the debtor, i.e. the management in the case of a company, and vice versa.
Karel Frielink
Attorney (Lawyer) / Partner
