The corona pandemic has put liquidity positions under pressure in many sectors. The last thing they want is to go bankrupt while the company is a very healthy company. The 2020 Temporary Payment Deferral Act aims to protect companies affected by the corona pandemic when their bankruptcy is filed. Businesses can seek protection under this law and courts are reluctant to declare bankruptcy for businesses that have run into trouble as a result of the pandemic.
Yet now more than ever before, it remains to watch out for entrepreneurs. Companies that were on the verge of collapse just before the corona crisis can now also receive support from an unexpected source. The legislator is currently dealing with the bill Temporary Payment Postponement Act 2020. On the blog Van Till Advocaten explains how companies can invoke this law and a company whose bankruptcy is filed for bankruptcy can ask the court to postpone the handling of a bankruptcy petition.
Apart from the Payment Deferral Act, we see in practice that courts are reluctant to declare bankruptcy if the corona pandemic has demonstrably had consequences for the debtor's financial position.
For a successful appeal to the Payment Delay Act, the debtor must meet a number of conditions. Among other things, it must be demonstrated that due to the restrictive measures of the government there is a loss of turnover of at least 20% and that the company had sufficient income before the corona pandemic to meet obligations.
In case of a successful appeal to the Payment Postponement Act, the debtor will receive a two-month postponement of payment. At the request of the debtor, this period can be extended two more times for a maximum of two months each time. If a payment postponement is granted, the relevant creditor cannot enforce payment of his claim during the postponement. Also, the creditor cannot dissolve or terminate the agreement with the debtor, for example.
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