Bankruptcy Act

TITLE 1 BANKRUPTCY

Chapter 2 Effects of a Declaration of Bankruptcy

Article 20 Liquidation estate
The bankruptcy covers the entire property and all rights and interests and liabilities of the debtor at the time of the declaration of bankruptcy as well as anything he will acquire during the bankruptcy.

Article 21 Assets not falling under the scope of the liquidation estate
Nevertheless the following assets remain outside the bankruptcy (liquidation estate):
1° the things referred to in Article 447, numbers 1-3 of the Code of Civil Procedure, the equipment of members of the Army in accordance with their service and rank, any copyright in the instances where it is not possible to seize such rights, and what has been defined in Article 448, paragraph 1 of the Code of Civil Procedure, unless creditors present themselves in the bankruptcy on account of claims as defined in paragraph 2 of that Article;
2° whatever the bankrupt debtor will acquire during the bankruptcy through personal activities, remuneration for an office or calling or pay, wages, pension or benefit if and to the extent so specified by the magistrate (''rechter-commissaris'');
3° financial means provided to the bankrupt debtor in compliance with a statutory liability for the provision of maintenance;
4° an amount, set by the magistrate (''rechter-commissaris''), which is derived from the proceeds (benefits) of a parental usufruct as meant in Article 253l, paragraph 3, of Book 1 of the Civil Code, in order to meet the charges attached to such a usufruct within the meaning of Article 253l, paragraph 3, of Book 1 of the Civil Code, and the costs for the care and upbringing of the involved child;
5° the amount deposited with the clerk of the court pursuant to Article 642c of the Code of Civil Procedure;
6° the assets meant in Article 60a, paragraph 3;
7° an entitlement to a credit balance of a life annuity savings account or to the value of a life annuity investment right as referred to in Article 1.7, paragraph 1, under (b), of the Income Tax Act 2001, to the extent that the amounts put in are taken into account in the taxation of Income Tax for the taxable income derived from work en housing.

Article 22 Definition of 'bankrupt debtor'
The definition of 'bankrupt debtor' in the preceding Article also includes the spouse or registered partner with whom the bankrupt debtor is married or has entered into a registered partnership which encloses a community of property.

Article 22a Entitlements based on a life insurance agreement
- 1. With regard to a life insurance agreement the following assets remain as well outside the liquidation estate:
a. the right to surrender a life insurance in return for the surrender value insofar as the beneficiary or policyholder would be unreasonably disadvantaged by such surrender;
b. the right to change the appointed beneficiary, unless such change is made on behalf of the liquidation estate and the beneficiary or policyholder will not be unreasonably disadvantaged as a result thereof;
c. the right to borrow money on the life insurance policy.
- 2. In order to exercise the right to surrender the life insurance agreement or the right to appoint another beneficiary, the liquidator (''curator'') needs the approval of the magistrate (''rechter-commissaris''), who, where necessary, shall determine to which amount such rights may be exercised. The liquidator (''curator'') may only transfer (assign) the rights from the life insurance agreement with the written consent of the policyholder.
- 3. If the liquidator (''curator'') has changed the person who has been appointed as beneficiary, such change shall lose its effect on the termination of the bankruptcy.
- 4. Where, after the moment on which the debtor was declared bankrupt, an appointment as beneficiary has become irrevocable, such irrevocability cannot be invoked against the liquidation estate. The insurer may not pay out any insurance benefit to which the appointed beneficiary is entitled. To the extent that it has been established that no other person will be appointed as beneficiary, the first two sentences of the present paragraph remain inapplicable. Article 69 applies accordingly in respect of the beneficiary.
- 5. In derogation from paragraph 4, second sentence, the insurer may invoke, against the liquidation estate, a payment which he made to the beneficiary insofar the liquidator ('curator') does not prove that the insurer at the moment of that payment was aware of the bankruptcy or of a preceding seizure of the entitlement derived from the life insurance agreement. In such event, however, the liquidator ('curator') may recover that payment from the beneficiary who received it.

Article 23 No right of disposition; no right of administration
As a result of the declaration of bankruptcy the bankrupt debtor loses the right to dispose of and to administer his assets (property) as far as these belong to the liquidation estate, this with effect from and including the day on which the bankruptcy order is rendered.

Article 24 Obligations arisen after the declaration of bankruptcy
The liquidation estate is only liable for obligations of the debtor that have arisen after the declaration of bankruptcy to the extent that the estate benefits from such obligations.

Article 25 Rights of actions (legal actions) exercised during bankruptcy
- 1. Rights of action (legal actions) related to rights (claims) and obligations belonging to the liquidation estate, shall be exercised by as well as against the liquidator ('curator').
- 2. If such rights of actions (legal actions) are exercised or continued by or against the bankrupt debtor and they lead to a judgement against that bankrupt debtor, then this judgment shall have no legal force against the liquidation estate.

Article 26 Right of actions exercised by the submission of a claim for verification
Rights of actions (legal actions) which have as objective the performance of an obligation from the liquidation estate, cannot be exercised during the bankruptcy against the bankrupt debtor in another way than by submission for verification.

Article 27 Legal proceedings started by the debtor and still pending on the day of the declaration of bankruptcy
- 1. If a lawsuit (legal action), started by the bankrupt debtor, is still pending during bankruptcy, then the legal proceedings will be stayed upon the request of the defendant in order to give him the opportunity to summon the liquidator ('curator'), within a period to be set by court, to take over the proceedings.
- 2. If the liquidator ('curator') does not respond to such summons, the defendant has the right to request that the legal proceedings against him will be dismissed; failing such a request, the legal proceedings between the bankrupt debtor and the defendant may be continued, yet without any liability or disadvantage for the liquidation estate.
- 3. The liquidator ('curator') is at all times entitled, even without being summoned, to take over the legal proceedings and cause the removal of the bankrupt debtor from the legal proceedings.

Article 28 Legal proceedings started against the debtor and still pending on the day of the declaration of bankruptcy
- 1. If a right of action (legal action), exercised (started) against the bankrupt debtor, is still pending during bankruptcy, then the plaintiff is entitled to request a stay of legal proceedings in order to give him the opportunity to summon the liquidator ('curator'), within a period to be set by court, to appear in the proceedings.
- 2. By his appearance, the liquidator ('curator') will take over the legal proceedings as a result of which the bankrupt debtor is removed as a party from the proceedings by operation of law.
- 3. If the liquidator ('curator'), after his appearance, immediately acknowledges the legal claim of the plaintiff, the costs of proceedings of the opposing party shall not constitute an estate debt*).
- 4. If the liquidator ('curator') does not appear in court, the provision of Article 25, paragraph 2, does not apply to a judgment to be obtained against the bankrupt debtor.

*) Estate debts are debts which are made by or with the consent of the liquidator for account of the liquidation estate; the involved creditor has a preferential claim (estate claim) that must be satisfied first from the assets of the liquidation estate.

Article 29 Lawsuits for the performance of an obligation pending at the start of the bankruptcy
To the extent that lawsuits (legal actions), pending at the moment of the declaration of bankruptcy, have as objective the performance of an obligation from the liquidation estate, the legal proceedings shall be stayed after the bankruptcy order and will only be continued if verification of the claim is disputed. In such case the person disputing the verification will become a party to the proceedings instead of the bankrupt debtor.

Article 30 Pleadings already submitted at the start of the bankruptcy
- 1. If pleadings and other statements in the legal proceedings had been submitted already to the court for judgment before the bankruptcy order was rendered, Article 25, paragraph 2, and Articles 27 up to and including 29 are not applicable.
- 2. Articles 27 up to and including 29 shall become applicable again if the legal proceedings pending before the court are continued as a result of a decision of that court.

Article 31 Acts of the debtor performed during legal proceedings to harm is creditors
If legal proceedings are continued by or against the liquidator ('curator') or, in the case of Article 29, against a creditor, the liquidator ('curator') or such creditor may invoke the nullity of acts performed by the debtor in the proceedings before he was declared bankrupt, if it is proved that the debtor deliberately disadvantaged his creditors by such acts and that this was known to the opposite party in the proceedings.

Article 32 Pending lawsuits when insolvency proceedings in another EU Member State are opened
Articles 27 up to and including 31 apply accordingly to lawsuits (legal actions) concerning an asset or right with regard to which the debtor has lost the right of administration and the right of disposition as a result of the opening of insolvency proceedings which have to be recognized in the Netherlands on the basis of Article 16 of the European Regulation mentioned in Article 5, paragraph 3, if these proceedings are winding-up proceedings within the meaning of Article 2, under point (c), of that European Regulation.

Article 33 Seizures (attachments) made before the declaration of bankruptcy
- 1. A bankruptcy order shall have as effect that all judicial enforcements against any part of the assets (property) of the debtor, started before the declaration of bankruptcy, immediately end and that, from that time, no judgment may be enforced by detention (imprisonment) of the debtor.
- 2. Seizures (attachments) made prior to the declaration of bankruptcy cease to exist; the registration of a statement to that effect from the magistrate (''rechter-commissaris'') authorises the keeper of the public registers to delete the registered seizures (attachments). As soon as the bankruptcy takes an end as a result of the nullification or termination of the bankruptcy order, the seizures (attachments) take effect again, provided that the seized property still forms a part of the liquidation estate. If a registration of a seizure (attachment) has been deleted from the public registers, the involved seizure (attachment) shall only take effect again if a writ informing the debtor of the revival of the seizure is registered within fourteen days after the seizure had taken effect again.
- 3. If the debtor is held in detention for non-payment of a debt, he will be released as soon as the bankruptcy order has become final and binding, without prejudice to what is provided in Article 87.
- 4. The provisions of the present Article do not apply to a detention in custody in relation to the enforcement of judgments, court orders and authentic deeds through which the payment of maintenance due pursuant to Book 1 of the Civil Code is ordered or promised, including payments due for the care and upbringing of a minor and for the education of an adult who has not yet reached the age of 21 years, nor do they apply to a detention in custody in relation to court orders through which one of the partners (spouses) is forced to make a payment to the other partner (spouse) that is indebted pursuant to Article 85, paragraph 2, of Book 1 of the Civil Code, and they apply neither in relation to decisions based on Section 6.5 of the Work and Support Act (Wet werk en bijstand).

Article 33a [repealed on 01-01-1978]

Article 34 Foreclosures already started before the start of bankruptcy
If, prior to the declaration of bankruptcy of the debtor, the realisation by execution (foreclosure) of his property is at such an advanced stage that the date of sale has been set already, then the liquidator ('curator') may continue that sale for account of the liquidation estate, upon an authorisation given by the magistrate ('rechter-commissaris').

Article 35 Transfers still to be completed by the debtor after the declaration of bankruptcy
- 1. If, on the date of the declaration of bankruptcy, not all acts required for a transfer (delivery) by the debtor have been performed yet, the transfer (delivery) can no longer be effectuated validly.
- 2. Where the debtor, prior to the declaration of bankruptcy, had already in advance transferred (delivered) a future asset, this asset will belong to the liquidation estate if it was acquired by the debtor after the beginning of the day of the declaration of bankruptcy, unless it consists of standing crops (fruit or vegetation not yet harvested) to which the debtor was entitled before the declaration of bankruptcy by virtue of a limited property right (right in rem) or a lease or farm lease agreement.
- 3. For the purpose of Articles 86 and 238 of Book 3 of the Civil Code, a person who has acquired an asset from the debtor is deemed to have been aware of the debtor's lack of legal capacity (lack of right of administration and lack of right of disposition) after the bankruptcy order had been published as referred to in Article 14, paragraph 3.

Article 35a Not registered qualitative obligation
If a stipulated qualitative obligation as referred to in Article 252 of Book 6 of the Civil Code had not yet been registered in the public registers on the date of the declaration of bankruptcy, the liquidator ('curator') may sell (foreclose) the property in respect of which it was made free of such an obligation in accordance with Article 101 or 176.

Article 35b Donation under a condition precedent or time stipulation
Where the debtor has made a donation (gift) under a condition precedent or a time stipulation with a future effective date and, on the day of the declaration of bankruptcy, this condition has not yet been fulfilled, respectively, this effective date has not yet been reached, then the beneficiary cannot derive any rights from that donation (gift) against the liquidation estate.

Article 36 Expiration of prescription period or statutory time limit during bankruptcy
- 1. If a prescription period in respect of a right of action (legal action) as referred to in Article 26 would expire during the bankruptcy or within six months after its ending, then this period shall continue to run until six months have passed after the end of the bankruptcy.
- 2. Paragraph 1 applies accordingly to absolute time limits which start to run by operation of law.

Article 36a Expiration of a set time limit during bankruptcy
If, prior to the declaration of bankruptcy, a time limit has been set for the debtor pursuant to Article 55, paragraph 2, of Book 3 or Article 88 of Book 6 of the Civil Code, and this time limit has not expired on the moment of the declaration of bankruptcy, it shall continue to run to the extent as this is reasonably necessary to enable the liquidator ('curator') to determine his position. The counterparty may set a new reasonable time limit for the liquidator ('curator') for that purpose.

Article 37 Mutual agreements entered into prior to the bankruptcy
- 1. If a mutual agreement, at the time of the declaration of bankruptcy, has not been performed at all or only partially by both, the debtor and his counterparty, and the liquidator ('curator') does not state, within a reasonable period set for this purpose in writing by the counterparty, that the liquidation estate is bound by that agreement, then the liquidator ('curator') will lose his right to claim performance of the agreement.
- 2. If the liquidator ('curator') states that the liquidation estate is prepared to perform the agreement, then he must provide security for such performance when he makes this statement.
- 3. The preceding paragraphs do not apply to agreements through which the bankrupt debtor only has engaged himself to obligations which require a performance that is to be made by him personally.

Article 37a Claims on account of a rescission or nullification of an agreement; claims for compensatory damages
With regard to claims acquired by the counterparty against the bankrupt debtor on account of the rescission or nullification of an agreement concluded prior to the declaration of bankruptcy, or acquired as a compensation for damages suffered as a result of the non-performance of a claim which the counterparty already had acquired prior to the declaration of bankruptcy, the counterparty may present himself in the bankruptcy as an unsecured creditor.

Article 37b Obligations for the regular supply of gas, water electricity and heat
- 1. A counterparty may not, in relation to the bankrupt debtor, withhold the performance of an obligation resulting from an agreement for the regular supply of gas, water, electricity or heat, required to provide the primary necessities of life or for the continuation of an enterprise conducted by the bankrupt debtor, on the ground that the bankrupt debtor has not performed a financial obligation which already existed prior to the declaration of bankruptcy.
- 2. The non-performance by the bankrupt debtor of an obligation as meant in paragraph 1, which non-performance took place prior to the declaration of bankruptcy, does not produce a legal ground for the rescission of an agreement as meant in paragraph 1.
- 3. An appeal by the counterparty to a contractual stipulation, specifying that a bankruptcy order or an application for a bankruptcy order relating to the debtor or a seizure (attachment) of the debtor’s property by a third person produces a legal ground for the rescission of an agreement as meant in paragraph 1 or leads automatically to a rescission of such agreement, shall only have effect if the liquidator ('curator') has given his consent thereto.

Article 38 Delivery of goods traded on a commodity market
If, in a situation as referred to in Article 37, it has been stipulated that goods, which are traded on a commodity market, are to be delivered at a fixed time or within a certain period, and such time is reached or such period has expired after the declaration of bankruptcy, then the agreement is rescinded on account of the bankruptcy order, and the counterparty of the bankrupt debtor may in any event submit an unsecured claim for damages in the bankruptcy. Where the liquidation estate suffers a loss because of such rescission, the counterparty must compensate that loss.

Article 38a Hire-purchase agreements
- 1. When the bankrupt debtor is a purchaser under a hire-purchase agreement, both, the liquidator ('curator') and the seller, may rescind the hire-purchase agreement or any agreement for the hire-purchase of a ship.
- 2. Such a rescission has the same legal effects as the rescission of an agreement on the ground of a non-performance of the obligations (breach of contract) by the purchaser.
- 3. The seller may submit in the bankruptcy an unsecured claim for the amount which the purchaser is due to him.

Article 39 Lease and farm lease agreements
- 1. If the bankrupt debtor is a lessee (tenant), both, the liquidator ('curator') and the lessor (landlord), may prematurely terminate the lease agreement, provided notice of termination is given at an effective termination date in conformity with a termination date as indicated by local custom for such lease agreements. Furthermore, the agreed or customary notice periods must be observed, on the understanding, however, that three months' notice will in any case be sufficient. If rent has been paid in advance, no notice of termination of the lease can be given at an effective termination date before the last day of the period for which the rent as been paid already. The rent that becomes indebted as of the day of the declaration of bankruptcy will be an estate debt*).
- 2. If the bankrupt debtor is a farm lessee (agricultural lessee), the above applies accordingly.

*) Estate debts are debts which are made by or with the consent of the liquidator for account of the liquidation estate; the involved creditor has a preferential claim (estate claim) that must be satisfied first from the assets of the liquidation estate.

Article 40 Employment agreements and commercial agency agreements
- 1. Employees in service of the bankrupt debtor may give notice to terminate their employment agreement and, vice versa, the liquidator ('curator') may give notice to terminate their employment agreement, always with due observance of the agreed or statutory notice periods, on the understanding, however, that the employment agreement may be terminated in any event with six weeks' notice.
- 2. The wages and premiums relating to the employment agreement that become indebted as of the day of the declaration of bankruptcy are estate debts*).
- 3. The present Article applies accordingly to commercial agency agreements

*) Estate debts are debts which are made by or with the consent of the liquidator for account of the liquidation estate; the involved creditor has a preferential claim (estate claim) that must be satisfied first from the assets of the liquidation estate.

Article 41 Inheritance acquired by the bankrupt debtor
- 1. An inheritance to which the bankrupt debtor becomes entitled during the bankruptcy shall only be accepted by the liquidator ('curator') under the privilege that first an inventory of the estate of the deceased has to be made in order to assess whether the value of the assets of the deceased’s estate exceed the debts of that estate.
- 2. The liquidator ('curator') who intends to reject an inheritance, needs the authorisation of the magistrate ('rechter-commissaris') for doing so.

Article 42 Principle of fraudulent conveyance in bankruptcy
- 1. If the bankrupt debtor, prior to the declaration of bankruptcy, has performed a juridical act which he legally was not obliged to perform, while he knew or should have known that the recovery rights of his creditors would be harmed as a result thereof, then this juridical act is voidable on the ground of fraudulent conveyance and it may be nullified by the liquidator ('curator') on behalf of the liquidation estate by means of an extrajudicial declaration. Article 50, paragraph 2, of Book 3 of the Civil Code does not apply.
- 2. A non-gratuitously performed juridical act (act performed for consideration), either of a more-sided (multilateral) nature or of a one-sided (unilateral) nature but addressed to one or more specific persons, is only voidable on the ground of fraudulent conveyance if the other party, with or towards whom the bankrupt debtor has performed it, also knew or ought to have known that it would harm the recovery rights of the debtor’s creditors.
- 3. When a gratuitously performed juridical act (act performed without consideration) has been nullified on the ground of fraudulent conveyance, this nullification has no effect against the favoured person if he did not know and neither ought to have known that this juridical act harmed the recovery rights of one or more creditors of the person who preformed this act with or towards him, but only insofar this favoured person proves that he did (does) not enjoy any advantage of this juridical act (anymore) at the moment of the declaration of bankruptcy.

Article 43 Legal presumption of the existence of fraudulent conveyance
- 1. If the juridical act that harms the recovery rights of one or more creditors, is performed within one year before the declaration of bankruptcy, and the debtor had not yet legally committed himself before the start of this period to perform that act, then there is, subject to the right to provide counterevidence, a legal presumption that the knowledge meant at the end of Article 42, paragraph 1, first sentence, was present on both sides of the involved juridical act, if it concerns
1° an agreement within which the value of the obligation of the debtor considerably exceeds the value of the obligation of his counterparty;
2° the performance of a not yet due and demandable debt or the provision of security for such a debt;
3° a juridical act performed by the bankrupt debtor, who is a natural person, with or towards:
a. his spouse, his child or foster child, his father or mother, his grandfather or grandmother, his grandchild, his brother or sister or a child of his brother or sister;
b. a legal person in which he or one of the persons mentioned above under (a), is a member of the Board of Directors or of the Supervisory Board, or in which he or one of these persons, independently or jointly, take part as a shareholder, directly or indirectly, for at least one half of the issued share capital;
4° a juridical act performed by the bankrupt debtor, who is a legal person, with or towards a natural person:
a. who is a member of the Board of Directors or of the Supervisory Board of the debtor or who is this member’s spouse, child, foster child, father, mother, grandfather, grandmother, grandchild, brother or sister or the child of this member’s brother or sister;
b. who, independently or jointly with his spouse or one of the other persons mentioned above under (a), take part as a shareholder, directly or indirectly, for at least one half of the issued share capital of the debtor;
c. whose spouse, child or foster child, father or mother, grandfather or grandmother, grandchild, brother or sister or a child of this brother or sister, independently or jointly, take part as a shareholder, directly or indirectly, for at least one half of the issued share capital of the debtor;
5° a juridical act performed by the bankrupt debtor, who is a legal person, with or towards another legal person:
a. if one of these legal persons is a member of the Board of Directors of the other;
b. if a member of the Board of Directors of one of these legal persons, which member is a natural person, is also a member of the Board of Directors of the other legal person or if this member’s spouse, child, foster child, father, mother, grandfather, grandmother, grandchild, brother or sister or the child of this member’s brother or sister is a member of the Board of Directors of the other legal person;
c. if a natural person, who is a member of the Board of Directors or of the Supervisory Board of one of these legal persons, or if this member’s spouse, child, foster child, father, mother, grandfather, grandmother, grandchild, brother or sister or a child of this brother or sister, independently or jointly, take part as a shareholder, directly or indirectly, for at least one half of the issued share capital of the other legal person;
d. if the same legal person, or the same natural person, whether with or without his spouse, child, foster child, father, mother, grandfather, grandmother, grandchild, brother or sister or a child of his brother or sister, take part as a shareholder, directly or indirectly, for at least one half of the share capital of both legal persons;
6° a juridical act performed by the bankrupt debtor, who is a legal person, with or towards another legal person who is legally connected with the same group of companies as the debtor himself.
- 2. With a ‘spouse’ is equated a registered partner or another life companion.
- 3. By a ‘foster child’ is understood a person who is durably raised and cared for by the bankrupt debtor as if it was his own child;
- 4. A person who, less than a year before the nullification of the voidable juridical act, still was a member of the Board of Directors or of the Supervisory Board or a shareholder, is equated with a member of the Board of Directors or of the Supervisory Board or a shareholder.
- 5. If a member of the Board of Directors of a legal person, which legal person in itself is a member of the Board of Directors of a third legal person, itself is also a legal person, then this last legal person is equated with the legal person who is a member of the Board of Directors of this third legal person.
- 6. Article 138, paragraph 10, of Book 2 of the Civil Code applies if the bankrupt debtor is a legal person.

Article 44 [repealed]

Article 45 Legal presumption of fraudulent conveyance when juridical acts are performed gratuitously
When the recovery rights of one or more creditors have been harmed by a juridical act that has been performed gratuitously by the debtor (act performed without consideration) within one year before the declaration of bankruptcy, then there is a legal presumption that the bankrupt debtor knew or ought to have known that the before-mentioned recovery rights would be harmed as a result of this juridical act.

Article 46 [repealed]

Article 47 Nullification of the performance of a due and demandable obligation
The performance by the debtor of a due and demandable obligation can be nullified only on the ground of fraudulent conveyance if it is proved, either that the person receiving the performance knew at that moment that already a request (petition) for a bankruptcy order in respect of the debtor was lodged, or that the performance is the result of consultations between the debtor and the creditor with the intention to favour that creditor over other creditors.

Article 48 Performance to the holder of a debt instrument to order or bearer
- 1. It is not possible to reclaim a performance by virtue of the preceding Article from a person who, as holder of a debt instrument issued to order or bearer, was obliged to accept the performance on account of his legal relationship with former holders.
- 2. In such an event, the party in whose favour the debt instrument was issued (initially), must repay to the liquidation estate the amount which the debtor has paid to the holder of the debt instrument, but only if it is proved, either that at the moment on which the debt instrument was issued he had the knowledge referred to in the preceding Article, or that the issuance resulted from a consultation as referred to in that Article.

Article 49 Rights of actions based on Articles 42 - 48
- 1. Rights of actions (legal actions) based on the provisions of Articles 42 up to and including 48 must be exercised (instituted) by the liquidator ('curator') .
- 2. Nevertheless, the creditors may contest, on grounds derived from these provisions, the admission of a claim.

Article 50 The ending of legal proceedings after a final arrangement (composition) with the creditors
A termination of the bankruptcy based on the sanctioning (approval of the court) of a final arrangement (composition) with the creditors, shall have the result that the rights of actions (legal actions) referred to in the previous Article cease to exist, unless the final arrangement (composition) provides for a renunciation of any claim against the liquidation estate, in which case these rights of actions (legal actions) may be continued or instituted on behalf of the creditors by the liquidators out of bankruptcy.

Article 51 Legal effects of a nullification on the ground of fraudulent conveyance
- 1. The assets that have left the property of the bankrupt debtor as a result of the juridical act which has been nullified afterwards, must be returned to the liquidator ('curator') by the persons against whom this nullification has legal effect, all with due observance of Section 2 of Title 4 of Book 6 of the Civil Code.
- 2. Where a third person has not gratuitously (for consideration) in good faith acquired a right in a to be returned asset, his right shall be honoured. Any gratuitous acquisition (acquisition without consideration) by a third person in good faith shall not be reclaimed insofar as he proves that, at the moment of the declaration of bankruptcy, he has not enjoyed any advantage (anymore) from the nullified juridical act.
- 3. The assets, or the value thereof, received by the debtor as a result of the juridical act which has been nullified afterwards, shall be returned by the liquidator ('curator') insofar as this is advantageous for the liquidation estate. The person against whom the nullification has legal effect, may present themselves in the debtor’s bankruptcy as an unsecured creditor.

Article 52 Performance made in good faith to the debtor after he had been declared bankrupt
- 1. Where a claim of the debtor, arisen before the declaration of bankruptcy, has been performed to the debtor after he has been declared bankrupt, yet before the publication of his bankruptcy, the person who performed that claim will be released (discharged) from his obligation towards the liquidation estate, as long as it is not proved that he knew of the declaration of bankruptcy at the moment of performance.
- 2. Where a claim as referred to in the previous paragraph has been performed to the debtor after the publication of his bankruptcy, the person who performed that claim will only be release (discharge) from his obligation towards the liquidation estate, if he proves that, at the moment of performance, in his domicile no knowledge of the debtor’s bankruptcy could have been obtained through the statutory required publication, subject to the right of the liquidator ('curator') to prove that the bankruptcy was known to him nevertheless.
- 3. A person who has made a performance to a bankrupt debtor is in any event released (discharged) from his obligation as far as his performance has been received by the liquidation estate or has been beneficial for that estate otherwise.

Article 53 Setting-off a claim against a debt to the bankrupt debtor
- 1. A person who is both, a creditor and a debtor of the bankrupt debtor, may set-off his claim against his debt to the bankrupt debtor, provided that both, the claim and the debt, have come to existence before the declaration of bankruptcy or result from acts performed with the bankrupt debtor before the declaration of bankruptcy.
- 2. Claims against the bankrupt debtor willbe calculated, if necessary, in accordance with the rules set out in Articles 130 and 131.
- 3. The liquidator ('curator') may not invoke Article 136 of Book 6 of the Civil Code.

Article 54 Situations in which a set-off is not permitted
-1. Nevertheless, where a person has acquired from a third party, prior to the declaration of bankruptcy, a claim against the bankrupt debtor, he is not entitled to make a set-off as referred to in the previous Article if he did not acquire this claim in good faith; the same applies when a person has taken over from a third person, prior to the declaration of bankruptcy, a debt payable to the bankrupt debtor and he did not act in good faith at the time of the debt assumption.
- 2. A set-off is never permitted for claims or debts acquired (assigned) or taken over (assumed) after the declaration of bankruptcy.

Article 55 Set-off of a debt against a claim to order or bearer
A debtor of the bankrupt debtor who wishes to set off his debt against a claim to order or bearer, must prove that he was already the owner in good faith of the written debt instrument at the time of the declaration of bankruptcy.

Article 56 Community of property with the bankrupt debtor
A person who, together with the bankrupt debtor, is a co-proprietor of a community of property that will be divided and apportioned during the bankruptcy, may claim the application of Article 184, paragraph 1, of Book 3 of the Civil Code, even when the debt of the bankrupt debtor to that community (to the joint proprietors) is a debt under a condition precedent which has not yet been fulfilled. Articles 130 and 131 apply accordingly

Article 57 Distribution of sale proceeds (pledgee, mortgagee, limited proprietor)
- 1. Pledgees and mortgagees may exercise their (preferential recovery) rights as if there was no bankruptcy.
- 2. Limited proprietors who have acquired a limited property right in an asset of the bankrupt debtor prior to the declaration of bankruptcy, but whose limited property right has ceased to exist after a foreclosure of that asset by a pledgee or mortgagee, may at the distribution of the proceeds submit, on their own behalf, their claims for compensatory damages as referred to in Article 282 of Book 3 of the Civil Code.
- 3. At the distribution of the proceeds of foreclosed assets, the liquidator ('curator') shall, on behalf of the liquidation estate, exercise as well the rights granted by law to seizors (attaching creditors) of the property. He is bound to protect the interests of preferred creditors who are ranked higher than the before meant pledgees, mortgagees and limited proprietors.
- 4. If it is necessary to determine the order of preference, an application therefore may be made to the provisional relief judge of the District Court of which the magistrate ('rechter-commissaris') is a member. The distribution of proceeds shall be made in front of the magistrate ('rechter-commissaris') in the way prescribed in the Code of Civil Procedure.

Article 58 Position of the liquidator towards a pledgee and mortgagee
- 1. The liquidator ('curator') may subject a pledgee and mortgagee to a reasonable period of time within which they must proceed to exercising their rights in accordance with the previous Article. If the pledgee or mortgagee has not sold (foreclosed) the pledged or mortgaged asset (collateral) within this period, the liquidator ('curator') may claim that asset and sell it under execution pursuant to Article 101 or 176, without prejudice to the (preferential recovery) rights of the pledgee or mortgagee to the sale proceeds. The magistrate ('rechter-commissaris') may extend the period one or more times upon the request of the pledgee or mortgagee.
- 2. As long as a pledged or mortgaged asset has not yet been sold under execution (sold by foreclosure) by the pledgee or mortgagee, the liquidator ('curator') is able to release it from the pledge or mortgage with which it is encumbered by making a payment to the pledgee or mortgagee of the amount for which the pledge or mortgage serves as security and of the foreclosure costs already made.

Article 59 Sale proceeds are not sufficient to fully pay a pledgee, mortgagee or limited proprietor
If the sale proceeds of a pledged or mortgaged asset are insufficient to fully satisfy the secured or preferential claim of the pledgee or mortgagee or of any person whose limited property right in that asset has ceased to exist as a result of the foreclosure (sale by execution), then the pledgee, mortgagee or that limited proprietor may with regard to such shortfall present himself in the bankruptcy as an unsecured creditor.

Article 59a Mortgages and privileges on aircraft
- 1. Articles 57 up to and including 59 do not apply to a mortgage on an aircraft registered in the public registers referred to in Section 2, Title 1 of Book 3 of the Dutch Civil Code or in the Convention Register referred to in Article 1300, under point (d) of Book 8 of the Civil Code.
- 2. Mortgagees whose rights are established on an aircraft as referred to in the preceding paragraph, and creditors who pursuant to Article 1317 of Book 8 of the Civil Code have a privilege attached to such an aircraft, may exercise their rights as if there was no bankruptcy. Article 57, paragraphs 2 and 3, shall apply accordingly.
- 3. The liquidator ('curator') may subject these creditors to a reasonable period of time within which tyey must proceed to exercising their (preferential recovery) rights in accordance with the preceding paragraph. If the creditor has not sold (foreclosed) the aircraft within this period, the liquidator ('curator') may sell the aircraft under execution. Upon the application of the creditor the magistrate ('rechter-commissaris') may extend the period one or more times.
- 4. Articles 584d and 584f-584q of the Code of Civil Procedure apply accordingly to a sale under execution (foreclosure) by the liquidator ('curator'), on the understanding that the liquidator ('curator') shall be regarded as a seizor (attaching creditor) whose claim has not any preferential ranking and that the bankruptcy order shall be dealt with in agreement with what is provided for an official record of seizure (attachment).
- 5. The magistrate ('rechter-commissaris') in the bankruptcy may in that case order that a part of the general costs of bankruptcy, to be determined by him, shall be regarded as costs of foreclosure within the meaning of article 584n of the Code of Civil Procedure.
- 6. As long as the mortgaged aircraft has not yet been sold under execution (foreclosed) by the mortgagee, the liquidator ('curator') may release it from the mortgage with which it is encumbered by making a payment to the mortgagee of what is due in respect thereof, including the costs of foreclosure already made.
- 7. Article 59 shall apply accordingly.

Article 60 Right of retention
- 1. A creditor who has a right of retention with regard to a thing that belongs to the bankrupt debtor, does not lose this right as a result of the declaration of bankruptcy.
- 2. The thing may be claimed and sold by the liquidator ('curator'), under application of Article 101 or 176, without prejudice to the preferential rights which the law grants to the creditor with a right of retention on the basis of Article 292 of Book 3 of the Civil Code. To the extent that this is in the interest of the liquidation estate, the liquidator ('curator') may also return the thing to the liquidation estate by making a payment to the creditor of an amount equal to the debt in respect of which he may exercise his right of retention.
- 3. The creditor with a right of retention may subject the liquidator ('curator') to a reasonable period of time within which the liquidator ('curator') must proceed to the implementation (application) of the preceding paragraph. If the liquidator ('curator') has not sold (foreclosed) the thing within this period, the creditor may sell it himself under execution with due observance of the provisions applicable to the right of a pledgee in regard of the foreclosure (sale under execution) of a pledged asset without recourse to the court (summary foreclosure) or, in the case of registered property, of the provisions applicable to the right of a mortgagee in regard of the foreclosure (sale under execution) of a mortgaged asset without recourse to the court (summary foreclosure). The magistrate ('rechter-commissaris') may extend the period one or mote times upon the application of the 'curator'.
- 4. Where a right of retention is related to registered property, the creditor must notify the liquidator ('curator') of his intention to proceed to a sale under execution (foreclosure) of the involved immovable property; such notification must be given by means of a bailiff’s writ which is officially served on the liquidator ('curator') and it must be presented for registration to the keeper of the public registers for registered property within fourteen days after the expiration of the period meant in the preceding paragraph; if the creditor fails to comply with the before mentioned requirements, he loses his right to proceed to a sale under execution (foreclosure) without recourse to the court (summery foreclosure).

Article 60a Assets placed under a fiduciary administration of property
- 1. When assets, belonging to the property of the bankrupt debtor, are placed under a fiduciary administration, and creditors have presented themselves for verification, who are entitled to recover their claims from these assets as if they were unencumbered with any fiduciary administration, then the liquidator ('curator') shall claim these assets from the legal administrator, take them in control and sell them under execution insofar as this is necessary in order to satisfy these creditors from the sale proceeds. The fiduciary administration over that asset shall end as soon as the liquidator ('curator') has claimed the involved asset from the legal administrator. The sale proceeds shall be distributed amongst the before mentioned creditors in accordance with the present Act, insofar they have been verified. The part of the sale proceeds that remains after such distribution, shall be transferred by the liquidator ('curator') to the legal administrator, unless there are other creditors who may recover their claims from the involved assets under an acknowledgement (with due observance) of the fiduciary administration, in which case the remains of the sale proceeds will be distributed amongst those creditors in accordance with the present Act.
- 2. If only creditors have presented themselves for verification who may recover their claims from assets under an acknowledgement (with due observance) of an existing fiduciary administration, then these assets will be sold under execution (foreclosed) by the liquidator ('curator') in accordance with Article 101 and 176, subject to (under acknowledgement of) the fiduciary administration*).
- 3. In situations not covered by the previous paragraphs, assets of the bankrupt debtor that are placed under a fiduciary administration shall remain outside the bankruptcy, and the legal administrator only has to hand over to the liquidator ('curator') the benefits (fruits) produced by these assets, after deduction of the costs involved in the production of these benefits (fruits).
- 4. The legal administrator must render account to the liquidator ('curator') whenever the latter so requires.

*) The assets will remain under that fiduciary administration after they have been sold to and acquired by a new proprietor who, therefore, also has to acknowledge the still existing fiduciary administration.

Article 60b Assets under fiduciary administration that remain outside the bankruptcy
- 1. Where assets remain outside the bankruptcy on the basis of the preceding Article and the legal administrator has stopped to pay the creditors who are entitled to recover their claims from these assets as if those were unencumbered with a fiduciary administration, the District Court which rendered the bankruptcy order may instruct the liquidator ('curator'), upon the request of each of the earlier meant creditors who cannot submit his claim in the bankruptcy, to take control over these assets and to realise them (sell them under execution) on their behalf.
- 2. The statutory provisions applicable to a declaration of bankruptcy and applicable during the bankruptcy itself shall apply accordingly.

Article 61 Private (personal) property of the spouse or registered partner of the bankrupt debtor
- 1. The spouse or registered partner of the bankrupt debtor may take back all assets that belong to him and that do not belong to a marital community of property or, respectively, to a community of property of the registered partnership.
- 2. Where the spouse or the registered partner of the bankrupt debtor claims that certain rights to bearer and unregistered movable things remain outside the community of property due to a nuptial agreement or, respectively, a notarial deed drawn up for this purpose between the registered partners, this can be proven only towards (against) third persons in the way as prescribed in Article 130 of Book 1 of the Civil Code.
- 3. In respect of rights to bearer and things not being registered property acquired outside a community of property by the spouse or registered partner of the bankrupt debtor on account of Article 94, paragraph 2, under point (a) and (c), of Book 1 of the Dutch Civil Code or on account of a nuptial agreement or, where appropriate, a registered notarial agreement for a registered partnership, an entitlement must be proven, when disputed, by means of a description or documents.
- 4. Benefits (fruits) acquired from an investment or re-investment of financial means which belong to the spouse or registered partner of the bankrupt personally (privately) and which, therefore, do not belong to any community of property, may be taken back likewise by that spouse or registered partner, provided that the entitlement to the investment or re-investment can be proven, if disputed, by adequate documents to the satisfaction of the court. Article 95, paragraph 1, first full sentence, of Book 1 of the Dutch Civil Code applies to investments and re-investments.
- 5. If assets, that belonged to the private (personal) property of the spouse or registered partner of the bankrupt debtor, have been disposed of by the bankrupt debtor, but the purchase price has not yet been paid or the sale proceeds have been kept separate from the liquidation estate, the spouse or, respectively, the registered partner may take back that purchase price or the available sale proceeds.
- 6. For his personal claims against the bankrupt debtor, the spouse or registered partner is recognized as an unsecured creditor.

Article 62 [repealed on 01-01-2003]

Article 63 Marital community of property
- 1. The bankruptcy of a person who is married under any community of property or who has entered into a registered partnership under any community of property, shall be treated as the bankruptcy of that community of property. It will include all assets that fall within the scope of the community of property, except for those excluded by Article 21, and serve for the benefit of all creditors who are entitled to take recourse against the assets of the community of property. Assets of the bankrupt debtor personally (privately) that do not belong to the community of property, are only available for the recovery of claims insofar these claims could have been recovered from those assets if no community of property would have existed at all.
- 2. In the event of the bankruptcy of a person who is married under a community of property or who has entered into a registered partnership under a community of property, the statutory provisions of the present Act regarding acts performed by the bankrupt debtor apply in the same way to acts through which the community of property has been legally bound (committed), regardless which spouse or, respectively, registered partner has performed these acts.

Article 63a Cooling-off period
- 1. The magistrate ('rechter-commissaris') may proclaim, upon the request of any interested party or of his own motion, a cooling-off period during which each right of third persons, with the exception of creditors with an estate claim*), to take recourse against the assets of the liquidation estate or to claim the handing over of assets which are under control of the bankrupt debtor or liquidator ('curator'), may be exercised only with his (the magistrate’s) authorization**); such cooling-off period may not exceed a period of two months. The magistrate ('rechter-commissaris') may restrict his order to certain third persons, and he may attach specific conditions to his order as well as to the authorization which is to be granted by him to a third person who wants to exercise a right as referred to in the first sentence.
- 2. When a third person, in relation to the exercise of rights as referred to in paragraph 1, has subjected the liquidator ('curator') to a reasonable time period, this time period will be suspended (will not run any further) during the cooling-off period.
- 3. Upon the request of the person who lodged a request (petiton) for a bankruptcy order, a cooling-off period may be proclaimed also by the District Court which renders that bankruptcy order. A cooling-off period that is proclaimed simultaneously with a declaration of bankruptcy has legal effect from the day on which the bankruptcy order is rendered, that day included.

*) Estate debts are debts which are made by or with the consent of the liquidator for account of the liquidation estate; the involved creditor has a preferential claim (estate claim) that must be satisfied first from the assets of the liquidation estate.
**) This cooling-off period has been introduced to prevent that third persons, like lessors who have leased out assets, suppliers who have delivered assets under a retention of title or who may exercise a right of reclamation, but also pledgees with a non-possessory pledge, immediately after the declaration of bankruptcy will hurry to the premises of the bankrupt debtor to take away all assets with regard to which they claim to have a (preferential recovery) right, They act this way because the Dutch Tax Authorities have the right to attach (seize) all movable things which are found on the premises of the bankrupt taxpayer, irrespective of to whom these assets actually belong.

Article 63b Rights of a pledgee during the cooling-off period
- 1. In the event that the bankrupt debtor has granted (established) a pledge on a claim to name or on the usufruct of such a claim in accordance with Article 239, paragraph 1, of Book 3 of the Civil Code, the pledgee remains entitled, during the cooling-off period, to make a notification as meant in Article 239, paragraph 3, of that Book, and to collect payments made by the debtor of the pledged claim.
- 2. Article 490b, paragraph 2, of the Code of Civil Procedure applies accordingly, on the understanding that the pledgee has to deposit the entire amount to the person who shall keep it in safe custody.

Article 63c Attachment as referred to in the Tax Collection Act 1900 levied by the Tax Collector
- 1. During the cooling-off period, the Tax Collector who has levied an attachment (seizure) as referred to in Article 22, paragraph 3, of the Tax Collection Act 1990*) ('Invorderingswet 1990'), may not proceed to a sale under execution (foreclosure), unless the magistrate ('rechter-commissaris') has decided differently.
- 2. An attachment (seizure) as referred to in Article 22, paragraph 3, of the Tax Collection Act 1990*) ('Invorderingswet 1990'), that has been levied during the cooling-off period on a thing found on the premises of the bankrupt debtor, cannot be invoked against the owner of that thing or, if the thing is encumbered with a (non-possessory) pledge on behalf of another person, against this other person, if the owner or this other person had already claimed by bailiff’s writ the handing over of that thing before the attachment (seizure) was levied.

*) The Dutch Tax Authorities have the right to attach (seize) all movable things which are found on the premises of the bankrupt taxpayer, irrespective of to whom these assets actually belong, and to recover their claims from the sale proceeds of these assets.

Article 63d Pledge on account of a financial collateral agreement
Excluded from the assets meant in Article 63a, paragraph 1, are assets which are pledged on account of a financial collateral agreement as referred to in Article 51 of Book 7 of the Civil Code.

Article 63e Declaration of bankruptcy on account of a financial collateral agreement
- 1. Where a debtor has been declared bankrupt on account of a financial collateral agreement as referred to in Article 51 of Book 7 of the Civil Code, the bankruptcy order does not have, this in derogation from Article 23 and 35, retroactive effect to the beginning of the day on which it was rendered, with regard to a financial collateral agreement concluded by the bankrupt debtor prior to the day of the declaration of bankruptcy or with regard to a transfer, the establishment of a pledge or the instruction to make a set-off in respect thereof.
- 2. Articles 23, 24, 35, 53, paragraph 1, 54, paragraph 2, of the present Act as well as Article 72, under point (a), of Book 3 of the Civil Code, cannot be invoked against third persons with regard to a financial collateral agreement as referred to in Article 51 of Book 7 of the Civil Code, concluded by the bankrupt debtor after to the day of the declaration of bankruptcy, nor with regard to a transfer or the establishment of a pledge based on a financial collateral agreement or any other juridical act based on a financial collateral agreement on account of obligations of the bankrupt debtor that have come to existence after the date of the declaration of bankruptcy, provided that the involved juridical act is performed at the latest on the date of the declaration of bankruptcy and that the counterparty is able to show that he was not aware nor ought to have been aware of the declaration of bankruptcy when that juridical act was performed.