CONSOLIDATED BANKRUPTCY
Creditors, stay alert!
Aruba, Curaçao, St. Maarten and the BES-islands (Bonaire, St. Eustatius and Saba) will together be referred to as the Dutch Caribbean, although each has its own set of laws.
Bankruptcy in general serves the purpose of liquidating assets of a particular person or legal entity and distributing the proceeds among the combined creditors. Sometimes, several companies belonging to one and the same group of companies go bankrupt. In principle, the trustee in bankruptcy has to administer and liquidate the assets of each of the bankrupt estates individually.
When multiple companies of the same group go bankrupt, it …
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NON-POSSESSORY PLEDGE UNDER THE LAWS OF ARUBA
A non-possessory pledge requires a deed
Security rights are an important issue, especially in financing transactions. A company may, for example, guarantee the obligations of another company under a certain loan facility. There are several alternatives, one of which will be discussed here.
Under the laws of Aruba there are several kinds of pledges, in particular, the possessory and the non-possessory pledge. In the case of a possessory pledge, the physical control of the assets concerned will be transferred from the owner/borrower to the bank/lender.
In the case of a non-possessory pledge, regarding for example registered shares, the pledge is …
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THREE QUESTIONS ON ARUBAN BANKRUPTCY LAWS
FAQ
Question 1
In which cases and by whom may bankruptcy proceedings be initiated in accordance with Aruban bankruptcy law?
Filing for bankruptcy may be done either by the debtor itself or by one or more of its creditors. If the debtor is a company, generally speaking the managing directors do not have the authority to petition for bankruptcy of the company without authorization thereto from the general meeting.
The pre-requisites for making a bankruptcy order on application, regardless of whether the application is made by the debtor or by any of the other above mentioned persons, is, that the …
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THREE QUESTIONS ON DUTCH CARRIBBEAN BANKRUPTCY LAWS
FAQ
Question 1
In which cases and by whom may bankruptcy proceedings be initiated in accordance with Netherlands Antilles bankruptcy law?
Filing for bankruptcy may be done either by the debtor itself or by one or more of its creditors. If the debtor is a company, the managing directors do not have the authority to petition for bankruptcy of the company without authorization thereto from the general meeting, unless otherwise stipulated in the articles of association.
The pre-requisites for making a bankruptcy order on application, regardless of whether the application is made by the debtor or by any of the …
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WHAT IF A LENDER BECOMES A SHAREHOLDER OF THE BORROWER IN THE DUTCH CARIBBEAN?
The obligation to repay still ranks pari passu
If a lender takes over the shares in a borrower, the ranking of the borrower’s obligation to repay the loan does not change. Such obligations will continue to rank pari passu with the other creditors.
Let me give you an example. In the event of dissolution of the borrower, assuming the borrower is a company, all creditors must be satisfied as far as possible. A shareholder is, however, not considered to be a creditor of the company.
Under Article 2:30(1) of the Netherlands Antilles Civil Code, the liquidator must realize the assets …
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