Abuse of bankruptcy law
The right must be used for the purpose for which it was written. The purpose of bankruptcy law is to prevent people or companies from continuing to accrue debt that they cannot pay off.
Bankruptcy law is often used by a franchisor as a means of pressure to induce the franchisee to pay promptly. If payment is not made on time, the franchisor immediately threatens to file for the bankruptcy of the franchisee. No room is left for a possible counterclaim or to contest the claim.
In short, the bankruptcy law indicates that bankruptcy can be declared when there are several creditors and the debtor is in a state in which he has ceased to pay. The requirement that there must be more than one creditor will often be met when a franchisor claims to have a claim against a franchisee. As a creditor, for example, the current account credit already counts. However, the fact that there are several creditors is not a sufficient condition to be declared bankrupt. In addition, there must also be a situation in which payment has ceased.
When a franchisee leaves an invoice unpaid and the franchisee has a reason for this, it is therefore advisable to properly communicate and record the reason for non-payment. If the franchisee does not pay for a reason, he is not in the situation that he has ceased to pay, so the reason must be known. In this way, the franchisee avoids being wrongly put under pressure to file for bankruptcy or, more annoyingly, that, after the franchisor has already filed for bankruptcy, the situation has to be explained to the court, where there is actually a discussion about the amount of the invoice or the quality of the service or goods provided.
Ludwig & Van Dam franchise attorneys, franchise legal advice
![](https://ludwigvandam.megaconcept.nl/wp-content/uploads/2020/12/232court-min-400x222.jpg)
Other messages
Franchise Act will take effect on January 1, 2021 – mr. AW Dolphijn – dated December 3, 2020
The Franchise Act was already adopted on July 1, 2020, but it has now also been established by Royal Decree that the Franchise Act will enter into force on January 1, 2021.
Supermarket newsletter -29-
Supermarket newsletter -29-
Article Franchiseplus: “Divide the pain” – mr. Th.R. Ludwig – dated December 1, 2020
The corona crisis has brought many franchisors and franchisees into ...
Article De Nationale Franchise Gids: “Settlement problems with franchisee who is a general partnership” – mr. JAJ Devilee – dated November 30, 2020
In a recent dispute, two ex-spouses faced each other in an appeal procedure regarding the question whether the ex-wife forfeited penalty payments against the private company.
Article Franchise+ – “Recipient’s liability in a franchise context, what exactly is that about?” – mr. K. Bastiaans – dated November 24, 2020
The phenomenon of hirer's liability means that a third party can be held liable for the debts of another under certain conditions.
Franchisor liable for errors made by a franchisee? – mr. AW Dolphijn – dated November 23, 2020
A franchise organization asked the court to declare that the franchisor is not liable if a franchisee has made a serious mistake with a customer.