Anyone wishing to use the courts to compel creditors to accept a debt settlement must provide a transparent and verifiable overview of their entire financial position. The Amsterdam Court of Appeal made it clear on 18 August 2026 what happens if this is not achieved.
The case
A former solicitor, residing in Switzerland, had offered a debt settlement to two creditors. Both claims – one for €135,000 for construction work carried out and one for €66,000 for cars made available – arose from settlement agreements concluded on 21 August 2024. The total debt owed to these two creditors amounted to €201,000.
The offer stipulated that both creditors would jointly receive a one-off payment of €6,250, financed by the debtor’s client. The offer was based solely on his state pension income. In addition to this debt, there were also tax liabilities of nearly €38,000 arising from final income tax assessments for the years 2019, 2021 and 2022.
The debtor had previously undergone personal bankruptcy, which had been discharged due to a lack of assets. Until early 2026, he was a director and shareholder of various private limited companies and foundations. Shortly after the bankruptcy petition was filed on 4 February 2026, these roles were terminated. From Switzerland, he carried out work for a Dutch company, which paid his living expenses. Regarding any potential future remuneration for that work, he stated at the hearing that this was highly uncertain.
On 21 May 2026, the District Court of North Holland (sitting in Haarlem) rejected the application for a compulsory composition under Section 287a of the Bankruptcy Act (Fw). The debtor lodged an appeal with the Amsterdam Court of Appeal after withdrawing his application for admission to the statutory debt restructuring scheme – a requirement for admissibility, as set out in the Supreme Court judgment of 14 December 2012, ECLI:NL:HR:2012:BY0966 and the Supreme Court judgment of 11 June 2021, ECLI:NL:HR:2021:859.
The legal issue
The central question was whether the objecting creditors could reasonably have refused to agree to the proposed debt settlement, given the disproportion between their interest in full payment and the debtor’s interests.
Specifically, four grounds of appeal were raised. The debtor contested that the offer was insufficiently documented (ground 1), that the offer did not represent the maximum to which he should be deemed financially capable (ground 2), that admission to the WSNP would not offer a better prospect for the creditors (ground of appeal 3) and that insufficient weight had been given to their interest in the proposed arrangement (ground of appeal 4).
The judgement
The Court of Appeal emphasised the assessment framework whereby a compulsory arrangement under Section 287a of the Insolvency Act (Fw) is only admissible if the objecting creditors could not reasonably have reached a decision to object, taking into account the disproportionate nature of the interests involved. The starting point is that, in principle, every creditor is entitled to full payment. A creditor may only be compelled to consent to a composition in very exceptional circumstances constituting an abuse of power. The burden of proof rests with the debtor, as was previously established in the Supreme Court judgment of 12 August 2005, ECLI:NL:HR:2005:AT7799.
Furthermore, the offer must represent the maximum that the debtor can reasonably be expected to afford, and it must comprise a final settlement of all debts.
The Court of Appeal ruled that the offer had not been documented in a sufficiently sound and verifiable manner. A complete overview of the debtor’s assets and liabilities was missing. The debtor had not submitted any tax returns or an auditor’s report. Particularly problematic was the fact that the proposed arrangement made no mention whatsoever of the tax debt of almost €38,000; whereas, under a WSNP arrangement, preferential debts must, in fact, be included.
There was also insufficient clarity regarding the financial relationship with Leveraged Capital Europe B.V., of which the debtor had been a director until early 2026 and from which, by his own account, he had borrowed money. It also remained unclear what had happened to his shareholdings and whether their transfer had generated any proceeds. The same applied to the financial circumstances surrounding the sale of his home in the Netherlands.
The Court of Appeal further ruled that it could not be established that the offer of €6,250 was the maximum amount. The debtor was carrying out work from which remuneration might arise in the near future. He had not ruled out that possibility. Nor had he had the offer assessed by an independent and expert party following the judgment at first instance.
All grounds of appeal failed. The Court of Appeal upheld the District Court’s judgment. Pursuant to section 287a(6) of the Bankruptcy Act, the Court of Appeal saw no grounds for an order to pay legal costs. As the WSNP application had been withdrawn, the bankruptcy petition of 4 February 2026 had to be considered after all.
Implications for practice
This ruling underlines that Section 287a of the Bankruptcy Act sets a high bar for a debtor seeking to enforce a compulsory composition. The absence of a complete and verifiable overview of all debts and assets is, in itself, sufficient grounds for rejection. This applies in particular where there are preferential debts – such as tax liabilities – that have been excluded from the arrangement.
Two aspects deserve particular attention. Firstly, an offer based solely on current, formal income does not automatically count as the best possible offer if it is plausible that the debtor will receive additional income in the near future. Secondly, the burden of proof lies with the debtor: they must set out specific facts and circumstances and, where necessary, provide evidence. Merely stating them is not sufficient.
What you can do
Are you a creditor and have you received an offer for an out-of-court debt settlement? If so, have the offer assessed to see whether it meets the requirements set by case law: completeness, verifiability and full coverage of all debts. If the documentation is inadequate, the court will rule in your favour if you refuse the offer.
If, as a debtor, you are planning to apply for a compulsory settlement, ensure that you have a complete overview of your financial position, verified by an independent party, before the proceedings begin. If this overview is missing, the chances of the application being granted are slim – regardless of the amount of your offer. TK is happy to advise you on your position as a creditor or debtor, the preparation of the case file and the prospects in any proceedings.
Would you like more information?
Please contact Michiel or one of the other professionals from the Corporate & Commercial Litigation.
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