For an entrepreneur, bankruptcy is often the culmination of several failed attempts to overcome financial problems. Often actions have already been taken to increase turnover, restructuring attempts have been made and additional financial resources have been sought. If none of that has worked and the entrepreneur - be it a private person (through a sole proprietorship) or a legal person (usually a BV) - forcibly ceases to meet his or her financial obligations, bankruptcy becomes inevitable.
The entrepreneur can file for bankruptcy himself or one or more creditors can do so. The bankruptcy is decided by the judge. He also appoints a curator immediately. The trustee takes over the management and disposal of everything that belongs to the company from the entrepreneur. He or she will inventory the assets, sell them and distribute the proceeds among the creditors.
Those assets consist of inventory and stocks, but also accounts receivable, work in progress, trade name, website, other intellectual property rights and the like. The bankruptcy trustee prefers to sell all those assets at once; in that case we speak of a restart. The bankruptcy trustee often manages to retain employment for some of the staff. If a restart is unsuccessful, there is usually nothing for the curator to do but sell 'the tables, chairs and laptops' at an auction or privately.
Another task of the bankruptcy trustee, in addition to selling the assets, is to initiate a legality investigation. Especially for the director of a legal person in severe weather, it is important to take this into account well before the bankruptcy and to ensure that he or she gets through that investigation unscathed, when it comes to that. Sometimes this can be done by taking a critical look at the accounting itself, but in many cases further advice is desirable about the obligation to publish, current account relationships, (settlement of) securities, payments in the face of bankruptcy, and so on.
Tip: if you, as a director or shareholder, aspire to a restart yourself, it is wise to have your plan ready before the curator makes his entrance. For example, bankruptcy does not always have to mean the end of entrepreneurship.
Peter Bos, Wieringa lawyers (www.wieringa- advocaten.nl)