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A new (temporary) regime for turboliquidation

A new (temporary) regime for turboliquidation 525 400 Ekelmans Advocaten
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Turboliquidation, the process of swiftly winding up a legal entity, only exists in the Netherlands. Directors in countries such as Germany or England do not have this option. Turboliquidation is a coveted tool among ‘Dutch’ directors: as many as 36.456 turboliquidations took place in 2022. However, the landscape is about to change as the (prima facie restrictive) Temporary Turboliquidation Transparency Act is set to come into effect on 15 November 2023.

The quick and easy liquidation of a legal entity will soon be (partially) curtailed. On 14 March 2023, the Dutch Senate approved the Temporary Turboliquidation Transparency Act in response to concerns about fraud in turboliquidations during the corona pandemic. The aim of the law is to provide more transparency to creditors who are currently left in uncertainty following a turboliquidation. The law will be in effect for two years, with the option of a two-year extension, starting from 15 November 2023. With these impending changes, the question arises: Will turboliquidation continue to be an attractive option for the directors of Dutch BV or NV?

Turboliquidation, the process of swiftly winding up a legal entity, only exists in the Netherlands. Directors in countries such as Germany or England do not have this option.

How does turboliquidation currently work?

The current requirements for the turboliquidation of a company are simple. First and foremost, the company must find itself in a situation where it possesses no assets whatsoever—this means no inventory, cash, and outstanding receivables. To achieve this, directors initiate the process of “emptying” the company before proceeding with the turboliquidation. Subsequently, shareholders can pass a resolution of dissolution to officially terminate the company. Normally, in a standard liquidation, the liquidation phase then begins. However, in the case of turboliquidation, this phase is bypassed since the company has already been fully depleted of its assets. Consequently, the company ceases to exist immediately.

What changes for company directors and turboliquidating?

The fundamental requirements for turboliquidating a company remain unchanged. However, the director will now have to undertake additional actions. A mere report of the turboliquidation to the Chamber of Commerce will no longer suffice. Once the new law takes effect, directors must also submit supplementary documents and inform creditors accordingly.

These additional documents include:

  • A balance sheet and a statement of income and expenditure for the year in which the legal entity was dissolved, along with the previous financial year if, at the time of dissolution, annual accounts for that year have not yet been made public.
  • A description of the cause for the lack of benefits.
  • A detailed account of how the company’s income has been monetized and the proceeds distributed.
  • An explanation of the reasons why creditors remained wholly or partially unpaid.

Furthermore, the board is required to file financial statements for any previous financial years if they have not already been submitted. Additionally, the board must duly inform creditors about the filing of these documents with the Chamber of Commerce and inform them that the legal entity has been wound up.
The underlying objective of these obligations is to ensure prompt notification to creditors regarding the liquidation. Failure to fulfill these obligations could result in serious consequences for the board. In such instances, it would be considered an economic offense, subject to penalties that may include up to six months’ imprisonment, community service, or a fine of up to €22,500.

What is creditors are disadvantaged?

In the event that it comes to light that directors have caused harm to one or more creditors during the liquidation process, the court reserves the authority to impose an administration ban on those directors for a period of up to five years. The circumstances warranting such a ban include:

  • Failure of the directors to file the requisite documents with the Chamber of Commerce and neglecting to notify creditors of the ongoing liquidation.
  • Intentional actions taken by the directors prior to the turboliquidation that resulted in prejudice to one or more creditors.
  • Personal culpability of the directors for previous bankruptcy or turboliquidation occurrences, having been involved in such situations twice before.

The turboliquidation remains a useful tool despite the new requirements

The turboliquidation remains a valuable tool despite the introduction of new requirements. While the new law introduces additional obligations, turboliquidation still offers a convenient means to wind up or restructure legal entities. Shareholders should not be deterred by these new requirements, as the legislation primarily targets fraudulent activities and not those shareholders seeking a legitimate and efficient liquidation process.

Questions?

If your company has a Dutch branch and you are considering restructuring or dissolution, turboliquidation could still be a viable option for you. Should you require more information on turboliquidation or have any other questions related to corporate law, I invite you to reach out for a no-obligation consultation.

Author

Pim Lieffering is a corporate lawyer. He deals with all aspects of corporate law, from drafting and litigating on commercial contracts to advising on mergers and acquisitions. When Pim is asked a question, he always looks at the bigger picture. Because he looks just that little bit further, he regularly surprises his clients with creative solutions.

‘Duplicate Claim Detector (DCD)’ launched by Innovation Platform Verbond van Verzekeraars

‘Duplicate Claim Detector (DCD)’ launched by Innovation Platform Verbond van Verzekeraars 722 550 Ekelmans Advocaten
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Astrid van Noort was present as a speaker at the launch of the ‘Duplicate Claim Detector (DCD)’ by the Innovation Platform of Verbond van Verzekeraars.

Ekelmans Advocaten advised Verbond van Verzekeraars in the development of this Duplicate Claim Detector on a secure and responsible method of data exchange between insurers within the framework of the AVG.

With the Duplicate Claim Detector, an important tool has been developed that helps insurers prevent the payment of duplicate claims and identify potential fraud. Thereby, insurer integrity and risk management are significantly promoted.

Confidential data in good hands

Your organisation processes personal data on a large scale. You need that personal data for your core processes but you also wish to comply with all the rules and protect privacy. These two goals are not always easy to reconcile. Our lawyers can help you here.

When developing new products or services, creative solutions may sometimes be required in order to remain compliant with privacy legislation. The Ekelmans Advocaten Privacy Desk helps you use personal data optimally for commercial purposes while still guaranteeing the privacy of your customers.

Auteur

Astrid van Noort is partner Insurance & Liability and strategic AVG expert for major insurers. She devises practical, workable and commercially attractive solutions to complex problems. She also specialises in personal injury, income and sickness absence insurance and health insurance.

Ekelmans Advocaten in the ranking of The Legal 500 EMEA 2023

Ekelmans Advocaten in the ranking of The Legal 500 EMEA 2023 525 390 Ekelmans Advocaten
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The Legal 500 ranks Ekelmans Advocaten as one of the best Dutch Insurance law firms. We are very happy to read the excellent feedback from our clients. Thank you! Praise for the entire team and their ‘clout and extensive specialist knowledge’. Legal 500 specifically mentions Daan SpoormansFleur van KersbergenHanco ArnoldJan EkelmansFrank Schaaf and Astrid van Noort as recommended or key lawyers.

Legal 500 writes:

The team at independent Dutch firm Ekelmans Advocaten – Insurance & Corporate has ‘clout and extensive specialist knowledge’. The team has strong connections with Dutch insurers and has recently been particularly active in healthcare insurance, specifically matters relating to Covid-19, as well as handling a caseload that also includes claims relating to professional liability, D&O liability and general liability. The practice is led by Hanco Arnold. Key lawyer, Jan Ekelmans, is regarded for his litigation capacity, regularly acting on coverage disputes, and is experienced in healthcare, aviation and professional liability claims. Daan Spoormans, who was recently promoted to partner, is an experienced litigator, and associate Fleur van Kersbergen regularly represents insurance companies and insured in disputes, with specific expertise in professional liability.

Quotes from our clients:

‘(..) the office has  clout and extensive specialist knowledge’

 ‘Frank Schaaf is an absolute leader with massive knowledge in both the local and foreign insurance markets. A very strong and reliable lawyer.’

‘Daan Spoormans – Young, innovative and high knowledge’.

‘Fleur Van Kersbergen is the “go to lawyer” for professional liability matters as well as a perfect option for cross border issues or international clients doing business in The Netherlands.’

‘Ekelmans and Astrid van Noort are heads on, proactive and highly professional.’

‘Jan Ekelmans is an excellent litigator, with a good sense of humour.’

The Legal 500 assesses the strengths of law firms in over 150 jurisdictions. The rankings highlight the practice area teams who are providing the most cutting edge and innovative advice to corporate counsel. The Legal 500 research is based on the feedback from clients.

An overview of the Legal 500 rankings can be found on the website of Legal 500.

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Ekelmans Advocaten recommended in the ranking of best Dutch law firms

Ekelmans Advocaten recommended in the ranking of best Dutch law firms 525 390 Ekelmans Advocaten
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The prestigious international lawyers guide Chambers & Partners Europe awards Ekelmans Advocaten with a ranking on the list of the best Dutch Insurance law firms.

Our firm has emerged as a market leader and one of the best in our field.

Chambers writes:
The team is noted for its particular expertise in healthcare insurance matters. The contentious side of the practice also covers professional, D&O and general liability concerning construction and property damage. The law firm further advises on reinsurance and business interruption matters, as well as regulatory issues. Ekelmans Advocaten has a long track record advising on high-profile cases before the Supreme Court.

Numerous clients praise the teams client care, clear communication and commitment:
“Ekelmans are always willing to help and always willing to go the extra mile.”
“Ekelmans always responds quickly and communicates clearly”

Jan Ekelmans is specially recommended by clients:
“Jan Ekelmans is a brilliant lawyer. He is witty and very clever.”
“Jan is very knowledgeable and able to think along with us about the results we need.”

Chambers writes about Jan Ekelmans:
Jan Ekelmans is an experienced practitioner, with notable experience advising healthcare insurers. He also assists with reinsurance matters, as well as with disputes relating to D&O liability, business interruptions and fraud.

An overview of the Chambers Europe rankings can be found on the website of Chambers and Partners.

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In memoriam Adriaan de Buck

In memoriam Adriaan de Buck 2560 1804 Ekelmans Advocaten
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Our beloved partner and colleague Adriaan de Buck passed away on 21 December 2022. Last August he retired from his Corporate Law practice at Ekelmans Advocaten due to his illness.

Our beloved partner and colleague Adriaan de Buck passed away on 21 December 2022. Last August he retired from his Corporate Law practice at Ekelmans Advocaten due to his illness.

Adriaan was a natural unifier and optimist.
Clients and international partners speak highly of Adriaan commending him for his expertise, commitment and personal approach.
For his expert and entrepreneurial work as a lawyer and partner of our firm, we are grateful to Adriaan.

Working with Adriaan was a pleasure: he had a warm sense of humor and was a great sportsman in so many regards. From 2019, he combined his law practice with the chairmanship of his club, HBS, where he also played football.

Over a year ago, he became ill. Last summer, the whole firm bid him farewell as one of the partners of Ekelmans Advocaten. At that farewell, Adriaan recalled the many memorable times he spent with us in the long time he was part of the firm.

We cherish our fond memories of Adriaan and admire his strength and resilience in battling his  illness. Of special note is Adriaan’s unflagging interest for others, right up to the last moment.

We miss Adriaan and extend our deepest condolences to Margot, Jolein, Bram and Jip.

Netherlands UBO register temporarily closed to public, registration requirement still applies

Netherlands UBO register temporarily closed to public, registration requirement still applies 2560 1920 Ekelmans Advocaten
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It is not acceptable that random members of the public can request (financial) information about a UBO. This has been ruled by the European Court of Justice. The Netherlands UBO register has therefore been temporarily closed to the public. What does this ruling mean and what are its implications for the UBO register?

Anti-Money Laundering and Terrorist Financing Directive

The UBO register and the obligation to register is based on the European fourth and fifth anti-money laundering directives. This directive aims to combat financial-economic crime. This could include corruption, money laundering, tax evasion, fraud and terrorist financing.

Companies have to register their ultimate beneficial owners in this UBO register. Some of the information (name, month and year of birth, nationality, state of residence, nature and extent of economic interest in the company) was, until recently, accessible to everyone. Anyone could request an extract from the UBO register for a small fee.

European Court ruling on the public nature of the UBO register

In its ruling of 22 November 2022, the European Court of Justice (ECJ) invalidated part of the European rules on the UBO register. According to the Court, public access to information on a UBO constitutes a serious interference with the fundamental rights to respect for private life and protection of personal data. It is not acceptable that random members of the public can obtain (financial) information about a UBO without having an interest related to the purpose of the directive. That is, prevention of money laundering and terrorist financing. UBOs are also particularly at risk because once provided, the data from the UBO register can be freely stored and distributed. The provision in the anti-money laundering directive that information on a UBO must be accessible to every member of the public in all cases is invalid, the Court ruled.

Consequences for the Netherlands UBO register

In the Netherlands, at the request of the Minister of Finance, the Chamber of Commerce has temporarily closed the UBO register to the public. This means that temporarily no information from the UBO register can be requested. The Court’s ruling has no impact on the obligation to register ultimate beneficial owners in the UBO register. UBO’s must register, if they have not already done so.

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Ekelmans Advocaten continues to rise

Ekelmans Advocaten continues to rise 2000 1436 Ekelmans Advocaten
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The Legal 500 assesses the strengths of law firms in over 150 jurisdictions. The rankings highlight the practice area teams who are providing the most cutting edge and innovative advice to corporate counsel. The Legal 500 research is based on the feedback from clients. We are therefore especially proud of our advance in this ranking!

Legal 500 about our Insurance-team:

Noted for its international focus, the team at Ekelmans Advocaten – Insurance & Corporate has many years of experience handling a wide variety of liability and insurance law issues for clients. It provides a range of services to large and niche insurance companies, such as advice on compliance with financial regulations, assistance with privacy-related questions and policy wording. In addition, with the group comprising of seasoned Supreme Court litigators, it is also a strong choice for complex insurance claims; areas of expertise in this space include professional liability, fraud, D&O and personal injury. Hanco Arnold leads the team, which also includes Frank Schaaf, Jan Ekelmans, Astrid van Noort and Daan Spoormans.

A few quotes from our clients:

‘Ekelmans Advocaten – Insurance & Corporate’s ability to quickly solve difficult situations makes them a priceless asset to clients.’

‘The people I work with are, without exception, nice and very approachable. They go the extra mile when necessary. The way in which they take the lead in a file is pleasant, without losing sight of the role of the client. Another thing that makes them unique is how they involve the client in legal cases, both in terms of content and procedure.’

‘The lawyers working at Ekelmans Advocaten – Insurance & Corporate know the insurance business inside out and have all the resources and knowledge they need to stand by insurance companies and their insured in their legal matters. Not only do they give well-founded legal advice, they also know how to solve insurance issues in a more pragmatic way (while taking into account the interests of all parties involved). Something that is essential in the insurance business.’

Read more on the Legal 500 website

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Ekelmans Advocaten rises in the ranking of best Dutch law firms

Ekelmans Advocaten rises in the ranking of best Dutch law firms 2500 1795 Ekelmans Advocaten
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The leading international lawyers guide Chambers Europe awards Ekelmans Advocaten with a higher ranking on the list of the best Dutch Insurance law firms.

Chambers recommends our firm and writes:

Ekelmans Advocaten offers renowned expertise in litigation and has a long track record advising on high-profile cases before the Supreme Court. The team is well known for its experience regarding healthcare insurance matters, while the contentious side of the practice covers professional, D&O and general liability concerning construction, property and marine damage.

One client highlights that the firm’s team is made up of “smart people with a lot of knowledge who are still really friendly and social.”

Jan Ekelmans is specially recommended by Chambers. Chambers writes about Jan:
Jan Ekelmans is an experienced practitioner, with notable experience advising healthcare insurers. He also assists with reinsurance matters, event cancellation insurance and D&O liability claims. His working style is commended as being “very elegant and smart.”

An overview of the Chambers Europe rankings can be found on the website of Chambers and Partners.

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Ekelmans Advocaten appoints Daan Spoormans as partner

Ekelmans Advocaten appoints Daan Spoormans as partner 2085 2441 Ekelmans Advocaten
Daan Spoormans partner
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Daan Spoormans has been appointed partner at Ekelmans Advocaten as per 1 January 2022. Daan specialises in corporate law and contract law. He assists companies and insurers in complex disputes about commercial contracts. Daan also assists directors who have been accused of incorrect management.

Daan has been working at Ekelmans Advocaten since 2008. In recent years, he has built up a flourishing international practice. Due in part to his bilingual background (Dutch and German), Daan also has many clients from German-speaking countries.

Partner Corporate/German Desk Robert Kütemann: “Daan’s partnership really strengthens our corporate practice. Daan has a strong legal and strategic insight. For many years, he has made an important contribution to the corporate team, which is highly valued by clients.
Since Daan’s clients include both companies and insurers, his appointment fits in perfectly with our positioning as an Insurance & Corporate firm. We are very pleased to appoint Daan as a partner.”

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Ekelmans Advocaten is our new name

Ekelmans Advocaten is our new name 1600 898 Ekelmans Advocaten
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As of today we are called Ekelmans Advocaten – Insurance & Corporate. We have added ‘Insurance & Corporate’ as that encapsulates our expertise and client base.

Our firm’s new name as of today is Ekelmans Advocaten – Insurance & Corporate. ‘Insurance & Corporate’ refers to our firm’s focus. It stands for the specialist expertise of our lawyers and the fields of law in which they support their clients. Along with the name change, we have a new corporate style and a refurbished office.

Director Andrea van de Velde on the name and focus: “As an organization, we have gone for a more clearly defined profile in recent years and now we are aligning our name and image with this. Ekelmans is already a familiar name in the market and it is easier for international clients. Insurance & Corporate is our signature dish as it were, showcasing the best of what we have to offer.”

“Insurance & Corporate encapsulates our expertise and client base. ‘Insurance’ refers to our years of experience working with domestic and international insurers. We are specialized in the areas of law that are relevant to them, such as insurance and liability law. ‘Corporate’ refers to the companies we work with, the fields of law in which we assist them and the professional approach that our clients expect from us.”

Most Ekelmans Advocaten clients are companies operating in professional services, industry, corporate finance, insurance or health care.

The firm’s Corporate practice group supports companies with contracts, M&A, employment law, litigation and appeals in cassation. The Insurance practice group deals primarily with insurance and liability law. In addition to these two groups, our German Desk and Privacy Desk also offer an extensive range of services.

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