A Shift in Teleology: Utilising Bankruptcy Legislation to Protect Employees in Times of Economic Downfall
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2018-12-13
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en
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Bankruptcy practice in The Netherlands has undergone quite a shock last year. After the verdict in the case FNV/Smallsteps, pre-packs can no longer be used to restructure companies under new ownership. However, that manner of resolving the bankruptcy had saved almost 290.000 jobs in the latest economic depression. Currently, the degree of protection offered is economically seen more harmful, as the company takes months after the bankruptcy to restructure or the assets are simply liquidated. As a result, the bankrupt company’s employees end up losing out on income and stability. Transforming bankruptcy law and practice to offer protection in a different way can achieve the same results, allowing for a pre-packed transfer of the company without the blockade of complete protection, merely casting out redundant employees. Both the employees and general state of the economy would end up being better protected, if executed correctly. However, quite a few manners of abuse of bankruptcy law should be considered before actively transforming the bankruptcy code and –practice, both legally and ethically.
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Faculteit der Managementwetenschappen