Insolvency Law at Sint Eustatius (Netherlands)
In Sint Eustatius, a special municipality of the Netherlands, insolvency proceedings are governed by the Bankruptcy Decree BES (Faillissementswet BES), which applies to the Dutch Caribbean territories of Bonaire, Sint Eustatius, and Saba. This legislation outlines procedures for both bankruptcy and suspension of payments (moratorium) for individuals and entities. (Bankruptcy -Guide to doing business, Restructuring and insolvency law in Netherlands | CMS Expert Guides)
⚖️ Legal Framework
1. Bankruptcy (Faillissement)
Under Article 1 of the Bankruptcy Decree, a debtor who has ceased to pay its creditors can be declared bankrupt by a court order. The Court of First Instance appoints a bankruptcy trustee (curator) responsible for managing and liquidating the debtor's assets to satisfy creditor claims. A supervisory judge (rechter-commissaris) oversees the trustee's actions. The bankruptcy extends to all assets, regardless of location, and prohibits creditors from improving their position by pursuing assets outside the BES islands. The debtor's existing management does not continue operations during bankruptcy . (Bankruptcy -Guide to doing business, Bankruptcy -Guide to doing business)
2. Suspension of Payments (Moratorium)
A debtor anticipating an inability to pay debts can request a moratorium (surseance van betaling) under Article 204 of the Bankruptcy Decree. This temporary procedure aims to improve the debtor's financial situation through partial or full payment to creditors, potentially leading to a court-approved settlement. The Court of First Instance appoints an administrator (bewindvoerder), supervised by a supervisory judge (rechter-commissaris). If payment proves illusory, the moratorium converts into bankruptcy . (Moratorium -Guide to doing business)
3. Liquidation of Legal Entities
Voluntary liquidation of a legal entity begins with a resolution by shareholders, members, or the Court. The appointed liquidator manages the entity's affairs, converting assets into cash, settling debts, and distributing any remaining balance to entitled parties. If assets are insufficient to cover debts, the liquidation may convert into bankruptcy under court supervision . (Liquidation -Guide to doing business)
🧾 Key Considerations
Initiation of Proceedings: Bankruptcy can be initiated by the debtor, creditors, or, in exceptional cases, the public prosecutor. A debtor may file for bankruptcy voluntarily if they acknowledge their inability to meet financial obligations . (Restructuring and insolvency law in Netherlands | CMS Expert Guides)
Cooling Down Period: Both bankruptcy and suspension of payments may involve a Cooling Down Period, temporarily halting all creditor actions, including foreclosure by secured and privileged creditors . (International Insolvency | Dutch judiciary)
Foreign Bankruptcies: While foreign bankruptcy judgments are generally not enforceable in the BES islands due to the principle of territoriality, a foreign bankruptcy trustee may file a claim within a BES bankruptcy estate if the claim is not in conflict with BES law . (Foreign bankruptcies -Guide to doing business)
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