The WHOA is inspired by the well-known English scheme of arrangement and the US Chapter 11. This long-awaited and flexible instrument can be used to affect the position of nearly all of a company’s stakeholders and is expected to play a significant role on domestic as well as international restructurings. This publication aims to provide an overview of the various tools the WHOA offers a company and its stakeholders to achieve a restructuring.
In essence, a company in financial distress can apply the WHOA to offer a composition to its (secured) creditors that can be imposed on dissenting (classes of) creditors through obtaining court ratification. Future obligations can be amended or terminated and guarantees issued by group entities can also be included in the composition.