Under a new legislative proposal which was recently submitted to parliament, a mala fide director may be banned as a managing or supervisory director of any Dutch legal entity for a period of up to 5 years by means of a civil law disqualification as director (civielrechteliik bestuursverbod) as imposed by the Court. The proposal aims to improve the fight against bankruptcy fraud and pre-bankruptcy mismanagement and provides for an amendment of the Dutch Bankruptcy Act.
Pursuant to the proposal, such disqualification as director may be imposed on a (former) director or actual policymaker of a Dutch legal entity - either at the request of the trustee in bankruptcy of such entity or the public prosecutor - if, during or three years prior to the bankruptcy, such individual (i) is, in his capacity of (former) managing or supervisory director, held personally liable in the bankruptcy of a Dutch BV or NV by irrevocable judgment, (ii) has performed or allowed acts which constitute fraudulent preference and have been set aside by irrevocable judgment, (iii) has, to a serious degree, refused or failed to submit relevant information to or cooperate with the trustee in bankruptcy, (iv) was involved at least twice in prior bankruptcies and is to be blamed for that personally or (v) such individual or the entity in bankruptcy was irrevocably fined by the tax authorities for certain malicious practices.
The disqualification order is registered with the trade register. As a result of the disqualification as a director, the relevant individual cannot be appointed or continue to act as a managing or supervisory director of any Dutch legal entity unless the Court has resolved otherwise (e.g. in relation to his personal pension company).