The Tax Authority as a Creditor in a WHOA Procedure: Strategies for a Feasible Agreement
M. Jansen
Senior Financial Restructuring Advisor
A successful restructuring under the WHOA requires a realistic approach to all creditors, including the Tax Authority. This party holds a special position and demands a specific strategy.
The Act on the Confirmation of Private Plans (WHOA) provides companies with a powerful instrument to reach an agreement with creditors out of court. However, the involvement of the Tax Authority as a creditor adds an extra layer of legal and financial complexity to the process. Thorough preparation is crucial.
Core Principles for Negotiations
The tax authority applies strict guidelines for debt settlements. A proposal must not only be feasible for the company but also meet the conditions set by the Tax Authority. This often means that a detailed liquidity forecast and a solid business plan form the foundation of any serious negotiation.
Practical Checklist:
- Ensure complete and up-to-date tax returns.
- Prepare a multi-year forecast demonstrating the company's ability to meet future obligations.
- Be transparent about all assets and liabilities.
- Involve a specialized advisor with knowledge of insolvency law in a timely manner.
The ultimate goal is a confirmed private plan that provides legal certainty for both the company and the creditors. By correctly deploying the WHOA procedure, a technical bankruptcy can be averted and business continuity can be safeguarded.
Related Materials
Financial Restructuring in 5 Steps
A practical guide for SMEs.
The Difference Between Suspension of Payments and WHOA
Which path do you choose for your company?
Communication with Creditors
How to maintain trust during a process.
This article is intended for informational purposes and does not constitute legal advice. For a tailored process, we advise contacting a specialized advisor.