Bankruptcy Act

TITLE 1 BANKRUPTCY

Chapter 3 Administration of the Liquidation Estate

§ 1 The magistrate ('rechter-commissaris')

Article 64 Tasks of the magistrate
The magistrate ('rechter-commissaris') is charged with exercising supervision over the administration and winding-up of the liquidation estate.

Article 65 Obligation of the court to hear the magistrate first
Before issuing a decision on any matter in respect of the administration or winding-up of the liquidation estate, the cDistrict Court is obliged to hear the magistrate ('rechter-commissaris').

Article 66 Powers of the magistrate; hearing of persons
- 1. The magistrate ('rechter-commissaris') is entitled to hear witnesses or to order an expert's investigation in order to clarify all circumstances relating to the bankruptcy.
- 2. The witnesses are summoned on behalf of the magistrate ('rechter-commissaris'). Article 177 of the Code of Civil Procedure applies accordingly.
- 3. Articles 171, 172, 173, paragraph 1, first sentence, paragraph 2 and 3, 174 and 175 of the Code of Civil Procedure apply to a non-appearance and to a refusal to take the oath or to testify.
- 4. The spouse or former spouse of the bankrupt debtor or the person with whom the bankrupt debtor has or had a registered partnership as well as the children and more remote descendants and the parents and grandparents of the bankrupt debtor may invoke their right to refuse to testify.

Article 67 Appeal against an order of the magistrate
- 1. An appeal may be lodged with the District Court against any order of the magistrate ('rechter-commissaris'); such an appeal must be lodged within five days from the date on which the order is given. The District Court will decide after having heard the interested parties or after they have been duly summoned. Nevertheless, no appeal is available against the orders referred to in Articles 21, under point (2°) and (4°), 34, 58, paragraph 1, 59a, paragraph 3, 60, paragraph 3, 73a, paragraph 2, 79, 93a, 94, 98, 100, 102, 125, 127, paragraph 4, 137a, paragraph 1, 174, 175, paragraph 2, 176 paragraph 1 and 2, 177, 179 and 180.
- 2. In derogation from paragraph 1, the five day period starts to run, in the event of an appeal against an authorisation of the magistrate ('rechter-commissaris') granted to the liquidator ('curator') for the termination of an employment agreement, on the date on which the employee who makes the appeal could have become aware of that authorisation. When terminating the employment agreement, the liquidator ('curator') shall inform the employee of the possibility to make an appeal and of the period within which such an appeal must be lodged in order to be valid. An appeal lodged on account of a ground of voidability must be made by an extrajudicial declaration addressed to the liquidator ('curator') within fourteen days from the date as of which the employment agreement was terminated.

§ 2 The liquidator ('curator')

Article 68 Tasks of the liquidator
- 1. The liquidator ('curator') is charged with the administration and winding-up of the liquidation estate.
- 2. The liquidator ('curator') needs the magistrate’s authorization to start legal proceedings, except where it concerns verification disputes and the matters referred to in Articles 37, 39, 40, 58, paragraph 2, 60, paragraph 2 and 3 and 60a, paragraph 1.

Article 69 Objections against (intended) acts of the liquidator
- 1. Each of the creditors and the creditors committee appointed from them, as well as the bankrupt debtor himself may lodge a petition with the magistrate ('rechter-commissaris') in order to object against any act of the liquidator ('curator') or to achieve that the magistrate ('rechter-commissaris') shall order the liquidator ('curator') to perform a certain act or to refrain from performing an intended act.
- 2. The magistrate ('rechter-commissaris') gives his decision within three days after he has heard the liquidator ('curator').

Article 70 Two or more appointed liquidators
- 1. If more than one liquidator ('curator') has been appointed, then they can only validly perform acts with the consent of the majority or, in the event that the votes are equally devided, with authorization of the magistrate ('rechter-commissaris').
- 2. A liquidator ('curator') to whom in the bankruptcy order a specific role has been assigned, has the power to act independently within the limits thereof.

Article 71 Remuneration of the liquidators
- 1. Without prejudice to the provisions of Article 15, paragraph 3, the remuneration of a liquidator ('curator') shall be determined in each bankruptcy by the District Court.
- 2. In the event of a final arrangement (composition) with the creditors, the remuneration is determined in the judgment in which that arrangement (composition) is sanctioned (approved by the court).

Article 72 Protection of third parties; liability of the liquidator for performed acts
- 1. The absence of an authorisation of the magistrate ('rechter-commissaris'), where required, or the non-observance of the provisions of Articles 78 and 79, does not affect, as far as it concerns third parties, the validity of acts performed by the liquidator ('curator'). In such event, the liquidator ('curator') is only liable towards the bankrupt debtor and the creditors.
- 2. In derogation from paragraph 1, the termination of an employment agreement by the liquidator ('curator') without the authorisation referred to in Article 68, paragraph 2, of the magistrate ('rechter-commissaris'), is voidable. In addition, the liquidator ('curator') shall be liable towards the bankrupt debtor and the employee. Invoking the voidability of the termination may be done by means of an extrajudicial declaration to the liquidator ('curator') within five days as of the date on which the employment agreement was terminated.

Article 73 Dismissal of a liquidator
- 1. The District Court may dismiss the liquidator ('curator') at any time after he has been heard or duly summoned to appear, and replace him by someone else or appoint one or more co-liquidators ('medecurators'), in each case either on the recommendation of the magistrate ('rechter-commissaris') or upon a reasoned request of one or more of the creditors, the creditors committee or the bankrupt debtor.
- 2. The dismissed liquidator ('curator') must render account for his administration to the liquidator ('curator') who replaces him.

Article 73a Reports to be lodged regularly by the liquidator
- 1. Each time, at the end of each three month period, the liquidator ('curator') must issue a report about the state of affairs of the liquidation estate. The liquidator ('curator') must lodge his report with the clerk of the District Court where it shall be available for public inspection free of charge. There is no charge for the lodging of the liquidator’s report.
- 2. The period referred to in the preceding paragraph may be extended by the magistrate ('rechter-commissaris').

§ 3 The Creditors Committee

Article 74 Appointment of a provisional creditors committee
- 1. In the bankruptcy order or in a later court order, the District Court may appoint from the known creditors a provisional committee of one to three creditors in order to advise the liquidator ('curator'), provided that this is justified by the importance or the nature of the liquidation estate and that not already a decision has been made in respect of the appointment of a committee as referred to in the next Article.
- 2. If a member of this provisional committee does not accept his appointment or if he resigns or dies, then the District Court will fill the vacancy by choosing one of two candidates recommended by the magistrate ('rechter-commissaris').

Article 75 Appointment of a creditors committee
- 1. Whether or not a provisional creditors committee has been appointed from the creditors, the magistrate ('rechter-commissaris') must always consult the creditors on the appointment of a definitive creditors committee; this must be done at the verification meeting after completion of the verification. If the meeting considers this desirable, the magistrate ('rechter-commissaris') shall proceed with the appointment immediately. This creditors committee shall as well consist of one to three members.
- 2. A report of what has been discussed with regard to the appointment of a creditors committee, shall be included in the minutes of the meeting.
- 3. If a member of the definitive creditors committee does not accept his appointment of if he resigns or dies, the magistrate ('rechter-commissaris') shall fill the arisen vacancy.

Article 76 Right of inspection and of information of the creditors committee
The creditors committee may at any time demand inspection of the books, records and other data storage media relating to the bankruptcy. The magistrate ('rechter-commissaris') must provide the creditors committee with all information requested from him.

Article 77 Meeting of the liquidator and the creditors committee
In order to obtain the advice of the creditors committee, the liquidator ('curator') shall hold a meeting with the committee as often as he thinks fit. He shall chair and prepare the minutes of these meetings.

Article 78 Situations in which the liquidator needs to obtain the advice of the creditors committee
- 1. The liquidator ('curator') must obtain the advice of the creditors committee before instituting or pursuing any legal proceedings or make a defence in any legal proceedings, whether already instituted or pending, except in the case of verification disputes. He must also obtain the advice of the creditors committee on whether or not to continue the enterprise of the bankrupt debtor and also in the cases referred to in Articles 37, 39, 40, 58, paragraph 2, 73, paragraph 2, 100, 101, 175, last paragraph and 177, and, generally, in respect of the way how the liquidation estate must be wound up and how its assets must be realised and the time and the amount of the distributions to be made to creditors.
- 2. This advice is not required if the liquidator ('curator') has convened a meeting of the creditors committee, giving proper notice, in order to obtain such advice, and no advice was given.

Article 79 Liquidator intends to act contrary to the advice of the creditors committee
The liquidator ('curator') is not bound by the advice of the creditors committee. If he does not agree with it, he shall notify the creditors committee immediately thereof, which may then request the magistrate ('rechter-commissaris') to give a decision. If the creditors committee declares that it will make such a request, then the liquidator ('curator') must, for at least three days, suspend performance of any intended act which is contrary to the advice of the creditors committee.

§ 4 Creditors Meetings

Article 80 Magistrate and liquidator attend the creditors meeting
- 1. The magistrate ('rechter-commissaris') shall chair the creditors meetings.
- 2. The liquidator ('curator') or a substitute approved by the magistrate ('rechter-commissaris') must attend the creditors meeting.

Article 81 Votes cast at the creditors meeting
- 1. Decisions at a creditors meeting are taken with an absolute (normal) majority of votes of the creditors present. Each creditor may cast one vote per € 45. One vote is also cast for claims or fractions of claims of less than € 45.
- 2. The split-up of a claim after the declaration of bankruptcy does not give a right to more than one vote.

Article 82 Persons entitled to vote at the creditors meeting
Entitled to vote at the creditors meeting are all admitted and provisionally admitted creditors as well as bearers of verified claims endorsed 'to bearer.

Article 83 Appearance at the creditors meeting in person or through representatives
- 1. A creditor may appear at the meeting in person, through a representative with a written procuration (power of attorney) or through an advocate (solicitor admitted to the Bar) representing him.
- 2. With respect to a creditor who has appeared at the meeting through a representative, all notices convening later meetings shall be addressed to that representative, unless the creditor has requested the liquidator ('curator') in writing to send notices of meetings and other notifications to himself or to another representative.

Article 84 Creditors meetings convened by the magistrate
- 1. In addition to the meetings required under the present Act, a meeting of creditors shall be held whenever the magistrate ('rechter-commissaris') considers this to be necessary, or whenever he receives a reasoned request for such a meeting from the creditors committee or from at least five creditors representing one-fifth of the claims admitted or provisionally admitted.
- 2. In each instance, the magistrate ('rechter-commissaris') shall set the date, hour and place of the meeting, to which the creditors who are entitled to vote will be invited by letter, with mention of the subjects that will be considered (discussed) at the meeting.

§ 5 Court Orders

Article 85 No appeal or other remedies available against court orders of the District Court
All court orders in matters relating to the administration or winding-up of the liquidation estate shall be rendered by the District Court by way of final judgment, without the possibility of an appeal or other remedy (action), except in situations where the contrary has been provided by law.

Article 86 Court orders are enforceable immediately
All court orders and orders in matters relating to the administration or winding-up of the liquidation estate, including those not rendered by the District Court, shall be enforceable immediately [even when an appeal or other remedy (action) is available], unless the contrary has been provided by law.