Module 1 · Chapter 2

Restructuring Plan vs Scheme of Arrangement vs WHOA

A company can rewrite its debts in more than one way. This chapter compares the tools, and shows why only a restructuring plan can bind a creditor that holds out.

≈ 8 min read 8-question test

In this chapter

  • Why a vote of noteholders alone cannot do the job
  • How a scheme, a restructuring plan and the Dutch procedure differ
  • Why the court can act for a company based abroad

2.1Choosing the tool in one paragraph

Valkenrade, the Dutch parent of a cold-storage group, must rewrite two debts: its bond, called the Notes, and the facility, its loan from the bank. Noteholders could vote to change their own debt, or a court could bind creditors in one of three ways. But one noteholder, the fund, holds a third of the Notes and says no. So the choice turns on one question: which tool can bind the fund?

Key point

Pick the tool that can bind the creditor who says no. Here, only a restructuring plan can.

Also in this chapter

  1. Why a noteholder vote cannot do it
  2. Four ways to rewrite the debts
  3. Why a Dutch procedure cannot change English-law Notes
  4. How an English court can act for a Dutch company
  5. Your job

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