European Perspective In Brief

Europe has struggled mightily during the last several years to triage a long series of critical blows to the economies of the 28 countries that comprise the European Union, as well as the collective viability of eurozone economies. Here we provide a snapshot of some recent developments regarding insolvency, restructuring, and related issues in the EU. The NetherlandsOn July 11, 2013, the Enterprise Chamber of the Amsterdam Court of Appeal handed down a highly anticipated ruling regarding the compensation offered by the Dutch Minister of Finance in relation to the expropriation by the Dutch state of shares and subordinated debt issued by the SNS Reaal Group ("SNS"). The February 1, 2013, nationalization of SNS was the first-time application of the Dutch Intervention Act. On February 25, 2013, the Dutch Council of State ruled that the Dutch Minister of Finance was entitled to expropriate the shares and subordinated debt, but not future claims. The expropriation was effected for the purpose of shifting from the Dutch taxpayers to the private sector the burden of the SNS rescue package, which totals more than1 billion. In a widely reported decision that raises questions about the viability of the European Union's policy of imposing bail-ins as a condition for any future rescue packages, the Enterprise Chamber refused to bless the Finance Minister's zero-compensation offer. Specifically, the court ruled that the Minister failed to justify the offer, which in any case would have been unlikely to comply with the full-compensation standard required by both Dutch and international law. A valuation will now be performed by three independent experts appointed by the court. The decision may have ramifications beyond the Netherlands, with many European states and banks likely to require emergency support in the coming years. Questions may also be...