CONFLICTING INTERESTS IN CURACAO INSOLVENCY LAW (part 8)
Final remarks
The receiver can be faced with a multitude of conflicting interests. Often he will be able to reach a weighing of interests relatively quickly and without many problems, but sometimes he has to balance on a thin bankruptcy tightrope. In doing so the law offers him hardly any support and neither does case law due to it being strongly case-based, although there is the reassuring fact that from a liability point of view many of his decisions should ‘only’ be able to bear a limited review.
However, the receiver personally being faced with a conflict of interest, which …
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CONFLICTING INTERESTS IN CURACAO INSOLVENCY LAW (part 7)
Conflicting interests in connection with consolidated business operations
When multiple companies of the same group go bankrupt, it can be of major importance for a creditor of one of these companies to know how the winding up is developing of one or more of the other companies. Particularly when a consolidated bankruptcy is involved, the creditors will have to be alert. In connection with a consolidated bankruptcy, there will in actual fact be one single joined estate. If this is the case, in the various bankruptcies one single joint creditors’ meeting must be held of which all the creditors of …
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CONFLICTING INTERESTS IN CURACAO INSOLVENCY LAW (part 6)
Conflicting interests of different bankruptcy estates
The management of different but associated bankruptcy estates can be entrusted to one and the same person who therefore is appointed several times as receiver. In this connection group relationships come to mind. It is true that in connection with different estates with one and the same person as receiver, companies not affiliated in a group also come to mind, but this will probably not often occur. Regularly, (members of) groups go bankrupt (for instance RSV, OGEM, DAF, Fokker, Infotheek Groep, Bredero, Text Lite, Mediasafe, Medicopharma, Palthe, Verto, Wyers, HCS, UPC, Van der Moolen, …
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CONFLICTING INTERESTS IN CURACAO INSOLVENCY LAW (part 5)
Different types of interests
A receiver cannot escape the weighing of interests. Such a weighing should be verifiable. The line of thought followed by the receiver should be clear. Particularly because, apart from his liability and remuneration, these being of a different order, he has no self-interest in the winding-up of the bankrupt estate, the receiver is the obvious person to weigh the interests. If required he can and will himself be assisted by an expert. In connection with bigger bankruptcies or when a business is continued, it is for instance sensible also to appoint as receivers one or more …
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CONFLICTING INTERESTS IN CURACAO INSOLVENCY LAW (part 4)
The receiver and personal interests
The duties of the receiver are to represent the interests of others. When his personal interests are affected he must observe extreme restraint and openness. If there is a conflict of interest or if a semblance of it has been created, he ought to withdraw as the receiver. The receiver is not allowed to sell goods forming part of the estate to himself, even if this would have been allowed by the supervisory judge (direct conflicting interest). Even bidding in a public auction he has organized is in my opinion not compatible with the independence …
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CONFLICTING INTERESTS IN CURACAO INSOLVENCY LAW (part 3)
Conflicting interests of the receiver/advocate and his law firm
A receiver must be able to take decisions freely and be able to weigh the interests involved in a bankruptcy against each other in an objective and unbiased manner. Before accepting an appointment as receiver, the respective person must make certain that he is free to act as such. If he had been the advocate (lawyer, attorney) of the bankrupt or of his shareholder or managing director before the bankruptcy order, despite his qualities he is presumed to be unable to act as such, at any rate any semblance of bias …
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CONFLICTING INTERESTS IN CURACAO INSOLVENCY LAW (part 2)
The liability of the receiver
The special characteristics of the duty of a receiver bring with them that his liability, if any, must be assessed against a standard of due care which has been tuned to this. This standard boils down to the fact that a receiver ought to act as can reasonably be required of a receiver having sufficient insight and experience and performing his duties conscientiously and with dedication. Knowledge and experience exceeding the minimum requirements can to a certain extent color the standard in a concrete case: after all there is nothing against taking as a starting …
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CONFLICTING INTERESTS IN CURACAO INSOLVENCY LAW (part 1)
The receiver is sometimes described as an octopus
The receiver (trustee in bankruptcy) as an octopus: this means that in connection with each appointment he is in a way thrown in at the deep end because he has to make himself familiar with the relevant issues in a very short period and because of the number of interests involved in a bankruptcy and these being partly contradictory he often needs eight arms in order to cope with all the requirements and demands. One could just as well describe the receiver as a jack-of-all trades.
The receiver must make choices and …
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BANKRUPTCY AND INTEREST CLAIMS IN THE DUTCH CARIBBEAN
Bankruptcy vs non-bankruptcy claims
There are special statutory provisions regarding agreed interest rates, for instance, in a contract between the creditor and a party who subsequently goes bankrupt, during a bankruptcy (faillissement) and moratorium on payements (surseance van betaling). It is explicitly stated in the Netherlands Antilles Bankruptcy Decree (Faillissementsbesluit 1931) that only the interest accumulated prior to a pronunciation of bankruptcy may be paid from the bankruptcy assets (faillissementsboedel). In the event of a moratorium on payments a similar provision exists.
Bankruptcy does not mean that the bankrupt party ceases to be a debtor of non-verifiable claims. If at …
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DUTCH CARIBBEAN COURT DECISION IN TELECOM CASE
Scarlet about to enter telecom market in Sint Maarten
On 18 November 2008, the Administrative Court in Sint Maarten ruled that the Executive Council of Sint Maarten was not authorized to refuse Scarlet a business license for the provision and operation of international telecommunications services in Sint Maarten (click here for the judgment).
Scarlet, represented by Dr. Douwe Boersema of the law firm Spigthoff in Curaçao, appealed through the courts against the decision of the authorities in Sint Maarten to deny it such a license based on a moratorium on new telecom companies. The moratorium …
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PLEDGING FUTURE RECEIVABLES IN THE DUTCH CARIBBEAN
Bankruptcy pledgor will prevent valid pledge
Under the laws of the Netherlands Antilles, a right of pledge may be established on future receivables, however, the right of pledge on a future receivable will only be perfected the moment such a receivable comes into existence, provided that, at such a time, the pledgor is authorized to dispose over or encumber such receivables (‘beschikkingsbevoegd’).
Therefore, if a pledgor has been granted a suspension of payments (‘surséance van betaling verleend’) or has been declared bankrupt (‘failliet verklaard’) in the Netherlands Antilles, before a future receivable, directly resulting from an existing legal relationship, comes …
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MORATORIUM OF PAYMENTS IN THE DUTCH CARIBBEAN (II)
The debtor may make an offer of composition
The nature of a Netherlands Antilles’ moratorium differs substantially from a moratorium under US law and does, in particular, not cause pending proceedings to be stayed. Generally, a moratorium in the Netherlands Antilles protects a debtor from claims existing at the time of the moratorium. It does not prevent litigating such claims, but judgments obtained cannot be enforced.
During a moratorium, the creditor is prevented from enforcing ordinary agreements against the party to which the moratorium is granted. Instead, creditors may file their claims with the administrator in the moratorium. If the performance of the …
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