In particular, FNV Transport and Logistics strongly opposed this pre-cooked restart and stated in its press release that it was adamantly opposed to any form of pre-pack restart.
Background and legal basis of the pre-pack restart
In October 2013, Minister Opstelten submitted the bill ‘Business Continuity Act’ to enable a restart using the pre-pack construction. This bill has not yet been adopted by both chambers and is therefore not law.
As an advance on this possible future legislation, a number of courts have facilitated pre-pack bankruptcies of large companies (e.g. Estro Kinderopvang, Schoenenreus, Marlies Dekkers, Moes Bouw, Neckermann). In the meantime, dozens of companies in and outside the transport sector have restarted after a pre-pack construction.
What is a pre-pack restart?
The pre-pack construction originates from the Anglo-Saxon legal system and offers the possibility to ask the court to appoint a silent administrator, also intended receiver, prior to an impending bankruptcy. The silent administrator inventories the restart possibilities prior to the bankruptcy.
The company itself will also have developed a well-thought-out restart plan that is studied with the silent administrator and that can be rolled out after permission has been obtained from the court and the bankruptcy has been declared. In this way, a bankrupt company, or a healthy business unit, is continued as a ‘going concern’ after bankruptcy. The major advantage of the pre-pack method is that the business activities are continued and no unrest is created among staff, suppliers and customers. The production and trade being at a standstill for too long often forms the final death blow, after which a restart is no longer possible and the goodwill of the company is completely written off.
An ‘old-fashioned’ restart without a pre-pack construction only succeeds by the grace of the trustee (formally the bankruptcy judge), which brings with it a great deal of uncertainty. Moreover, the primary task of the trustee, realising estate assets, can be at odds with the aim of continuing the company as quietly as possible.
As disadvantages of the pre-pack method I mention the non-transparent nature of the pre-pack, which will mainly be aimed at a restart from within the company’s own ranks and the possible precedent effect of steering towards bankruptcy earlier in the context of a (company) reorganisation. However, these disadvantages do not outweigh the advantages of increasing the chance of a successful restart. In those cases, employment will (partly) remain. If there is no restart after the bankruptcy, there will only be losers.
Is the criticism of the unions on a pre-pack restart justified?
In my opinion, the fierce opposition to any pre-pack restart ignores the weighty, in my opinion decisive, argument that companies that are in dire straits are offered a better perspective to continue their business activities with a well-constructed restart plan after accreditation by the receiver.
After the pre-pack restart at Princen, the FNV’s arrows are aimed in particular at receiver Mr. Deterink, who is accused of having cooperated in a restart without hiring (former) employees with an occupational health and safety past.
I cannot judge to what extent that was actually the case. At the time of posting the column, the first bankruptcy report had not yet been published. I do note that the Works Council (OR) is not assigned a role in the bill ‘Business Continuity Act’. Nor is the position of the (former) incapacitated employee discussed.
Every restart will require restructuring, including staffing levels. However, some employment will be retained after a restart. I find it questionable that there are union leaders who take a stand in the media against all pre-pack restarts a priori. This ignores the fact that a pre-pack restart is intended to safeguard the continuity of companies and to retain employment.
A successful restart, whether or not using a pre-pack construction, requires thorough preparation and a convincing restart plan for all stakeholders.
For more information about restarting after bankruptcy and other legal issues that you as a transport company will encounter, please contact Mr. Otto Lenselink (olenselink@transportrechtadvocaat.nl).
April 2015
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