WHOA
M&A / Merger ModelThe Dutch preventive restructuring procedure, offering class voting and cross class cram down in either a public or a confidential route.
Also written: Dutch scheme, Dutch restructuring plan, Wet homologatie onderhands akkoord
The WHOA sits inside Dutch insolvency legislation without being an insolvency procedure. The company continues to trade and the board stays in control, with the option of a court appointed restructuring expert running the process where creditors prefer that.
A class approves at two thirds by value of the creditors in that class who actually vote, which is a lower threshold than the 75% used in England and Germany and therefore a different blocking line. Cross class cram down is available where no dissenting class is worse off than it would be without the plan and at least one class that is in the money supports it.
Two features distinguish it. There are two routes, a public procedure listed under the European insolvency regime and recognised automatically across the Union, and an undisclosed procedure that keeps the restructuring out of public view but does not carry that automatic recognition. And the court can permit the company to terminate onerous contracts, which an English plan cannot do, so a business whose problem is a lease book or a loss making supply agreement has a reason to be there that has nothing to do with its debt.
On priority the Netherlands chose the relative priority approach permitted by the Directive: value is expected to follow the statutory ranking, and departing from it needs a reasonable ground and no prejudice to the class objecting. That is a materially different test from the English position, which has no priority rule at all.
Worked example
A group with Dutch operations and EU assets faces a dissenting class of noteholders, illustratively.
It runs a public WHOA, so the sanctioned plan is recognised automatically in other member states where its assets sit.
Had confidentiality mattered more than automatic recognition, the undisclosed route would have kept the process out of view at the cost of recognition resting on local rules.