On September 1, 2014, a legislative proposal on directors disqualification (in Dutch: wetsvoorstel civielrechtelijk bestuursverbod) was submitted to the House of Representatives of the Netherlands. This legislative proposal, which aims to amend the Dutch Bankruptcy Act, will enable the disqualification of (former) managing directors or actual policymakers of a Dutch legal entity that has been declared bankrupt. Such disqualification will prohibit the person concerned from acting as a direct or indirect managing director or supervisory director of any Dutch legal entity. The relevant person is also disqualified from acting as a direct or indirect actual policymaker. In addition, the direct or indirect managing director of a Dutch legal entity that in its turn acts as a managing director of a Dutch legal entity that has been declared bankrupt can also be disqualified. Supervisory directors cannot be disqualified, unless they acted as actual policymakers.
The purpose of the proposal is to combat bankruptcy fraud and to prevent managing directors from continuing mala fide activities via existing legal entities and/or newly incorporated legal companies.
The receiver (in Dutch: curator) of the Dutch legal entity that has been declared bankrupt can institute a court action to obtain a disqualification. The receiver must first obtain authorization thereto from the supervisory judge. Creditors of the Dutch legal entity that has been declared bankrupt cannot institute such action; however, they can request the supervisory judge to instruct the receiver to do so.
The court can only allow the action and impose the disqualification in one of the situations as described in the law. These situations must have occurred during the bankruptcy or in the three years prior thereto. In all situations, it must be possible to attribute personal blame to the person involved.
The disqualification can be imposed for a maximum period of five years and will commerce once the judgement has become irrevocable. The court can impose restrictions to the period and the applicable Dutch legal entities of the disqualification. As it might take a considerable amount of time before the judgement becomes final, the court can suspend the persons involved as managing directors or supervisory directors of other Dutch legal entities for the duration of the proceedings.
The consequence of a disqualification is that the person involved can no longer serve as a managing director, supervisory director or actual policymaker of any Dutch legal entity that was involved in the legal proceedings, unless otherwise determined by the court. Nor can the person involved be appointed as managing director or supervisory director of any Dutch legal entity. An appointment contrary to the disqualification is void. Since determining the actual policy does not entail a formal appointment, it is not clear how to verify if, and prevent that a person involved serves as an actual policy maker contrary to the disqualification. It is also unclear which sanction is attached to the infringement of this disqualification. If a disqualification leads to a Dutch legal entity no longer having managing directors, the court can appoint one or more temporary managing directors.
A disqualification or suspension must be registered with the Trade Register of the Chamber of Commerce, as a result of which it will be public. Such registration will end by operation of law as soon as the disqualification or suspension ends.
It has not yet been determined when the legislative proposal will enter into force. When enacted, it is expected not to have retroactive effect.