Dutch Supreme Court clarifies fraudulent conveyance application for linked transactions

HR 20 juni 2025, ECLI:NL:HR:2025:975 (Mega/NPB)

Knowledge transactions as a whole, not deal-by-deal: what the Dutch Supreme Court's 20 June 2025 ruling means for cross-border lenders and structurers dealing with Dutch counterparties.

For foreign counsel advising on transactions involving Dutch obligors, the actio Pauliana (Section 42 of the Dutch Bankruptcy Act, Faillissementswet, Fw) is a familiar but often under-appreciated risk. It is the Dutch trustee's principal tool for clawing back pre-insolvency transactions that prejudiced creditors. On 20 June 2025, the Dutch Supreme Court (Hoge Raad) handed down a judgment that materially affects how this test applies to complex, multi-step transaction structures — precisely the kind of structuring foreign firms frequently encounter in Dutch real estate, project finance, and corporate restructuring work.

Background: the Mega/NPB insolvency

The case arose out of the collapse of the Mega/NPB group, a Dutch project development group whose business model involved acquiring agricultural land, rezoning it for residential development, and selling it on at a profit. The group's principal financier, Rabobank, began winding down its credit facilities from 2009 onward amid the financial crisis.

In response, the group and a related set of companies (Nebo c.s.) entered into an elaborate and interlocking series of transactions beginning in June 2009: a "bouwclaimovereenkomst" (a construction-claim agreement) transferring future development rights and underlying real estate to Nebo; related security arrangements (pledges, mortgages, debt acknowledgements); a series of liability acceptances under which Mega/NPB companies acknowledged breach-of-contract claims running ultimately into the billions of euros; repurchase agreements; and a later substitution of one of the Nebo entities (Wieko) into parts of the arrangement.

When the Mega/NPB companies were declared bankrupt between July and December 2016, the bankruptcy trustee (curator) challenged this entire web of transactions under Section 42 Fw, arguing that the group's asset base had been stripped out (real estate and development rights transferred away) while its liabilities had been artificially inflated (via the liability acceptances and repurchase obligations) — to the detriment of ordinary creditors, including Rabobank.

The legal question: one transaction, or one scheme?

Section 42 Fw allows a trustee to avoid a transaction the debtor entered into voluntarily before bankruptcy, if at the time of the transaction the debtor knew or should have known that creditors would be prejudiced as a result (wetenschap van benadeling). Where the transaction is bilateral, the counterparty must have had the same knowledge.

The statute, on its face, is drafted around the single transaction. The question before the Hoge Raad was whether, where a debtor enters into a connected series of transactions (a "samenhangend geheel" or "samenstel" of rechtshandelingen) that only cause prejudice when viewed together, the required "knowledge of prejudice" must be assessed:

• separately, for each individual transaction in the chain, each tested at its own point in time; or

• for the connected whole, viewed as a single combined transaction.

Nebo c.s. argued the former: each transaction in the chain — the original 2009 construction-claim agreement, the later security grants, the liability acceptances stretching out to 2014, the repurchase agreements — had to independently satisfy the knowledge requirement at the moment it was concluded. On their reading, the Court of Appeal (Arnhem-Leeuwarden) had wrongly assessed knowledge only at the level of the scheme as a whole, without pinpointing the moment at which each individual transaction met the threshold.

The Supreme Court's ruling

The Dutch Supreme Court rejected this argument and confirmed the Court of Appeal's approach. The key passages of the judgment can be summarised as follows.

First, the Dutch Supreme Court reaffirmed that Section 42 Fw, although built around the single legal act, does not preclude a court from treating a connected series of transactions as a single unit where the circumstances justify it. This builds on earlier case law (HR 22 December 2009, ECLI:NL:HR:2009:BI8493, and HR 7 April 2017, ECLI:NL:HR:2017:635) establishing that transactions can form a sufficiently connected whole that their (prejudicial) effects must be assessed in conjunction.

Second — and this is the operative holding — the Dutch Supreme Court held that if a connected whole of transactions is properly the unit of assessment for the prejudice test, then logically the knowledge requirement must also be assessed at that aggregate level, not transaction-by-transaction. What matters is whether, at some point during the conclusion of any transaction forming part of the connected whole, the debtor (and, where Section 42(2) Fw applies, the counterparty) knew or should have known that prejudice to creditors would result from the scheme as a whole. There is no requirement that each individual transaction in the chain independently satisfy the knowledge threshold at its own inception.

Third, applying the same logic, the Dutch Supreme Court held that the requirement that the transaction be entered into "voluntarily" (onverplicht) — also a precondition for avoidance under Section 42 Fw — is likewise assessed at the level of the connected whole.

On the facts, the Court of Appeal had found, undisputed in cassation, that the Category A (construction-claim agreement and related contracts), C (liability acceptances), D (repurchase agreements), E (pledges/mortgages), F (real estate transfers) and G (Wieko's contractual substitution) transactions were sufficiently interconnected to be treated as one scheme. Given that finding, assessing knowledge of prejudice at the level of that connected whole was, in the Dutch Supreme Court’s view, the correct approach. The cassation appeal was dismissed, with the Dutch Supreme Court applying the simplified motivation route under Section 81(1) of the Judiciary (Organisation) Act (Wet RO) for the remaining grounds.

Why this matters in practice

This judgment closes off what had become a meaningful defence strategy in complex Dutch insolvency clawback litigation: structuring or characterising a scheme as a sequence of discrete, individually-defensible steps, each entered into before the relevant knowledge threshold was met, in the hope that a court would have to evaluate each step in isolation. The Dutch Supreme Court has now made clear that once a court determines that a series of transactions forms a sufficiently connected whole — a fact-intensive inquiry in itself, but one to which Dutch courts have shown themselves quite willing — the knowledge and voluntariness requirements travel with the scheme, not with each individual building block.

A few practical implications follow.

For transaction structuring involving Dutch counterparties facing financial stress, parties should assume that a sequence of related agreements, security grants, debt restructurings, or asset transfers entered into over an extended period (here, transactions spanning 2009 to 2015 were treated as one connected whole) can be unwound as a single unit if the combined effect was prejudicial, even where individual steps, viewed in isolation, might appear unobjectionable or might predate the point at which prejudice became foreseeable.

For due diligence on Dutch portfolio companies or counterparties, advisers reviewing historic intra-group restructurings, sale-and-leaseback arrangements, or security packages should look at the commercial substance and timeline of the whole arrangement rather than testing each agreement against the Section 42 Fw threshold in isolation. A structure that was rolled out incrementally specifically to manage fraudulent conveyance risk on a step-by-step basis offers materially less protection after this ruling than it might previously have appeared to.

For secured lenders and their counsel, the judgment is a reminder that security taken as part of a broader, prejudicial restructuring scheme is vulnerable to avoidance even if the security documents themselves were executed at a point in time when the lender's own knowledge, viewed transaction-by-transaction, might not yet have crystallised. What matters is the lender's or grantor's knowledge in relation to the scheme as a whole.

For Dutch insolvency practitioners and bankruptcy trustees (curatoren), the ruling provides welcome confirmation that pleading a connected scheme is not merely a procedural shortcut but carries through consistently to every element of the Section 42 Fw test — prejudice, knowledge, and voluntariness alike.

A note on threshold (samenhangend geheel)

It is worth flagging that the Dutch Supreme Court did not have to define precisely when transactions qualify as a sufficiently "connected whole" — that finding was undisputed in cassation and so was not itself before the Dutch Supreme Court. Practitioners should expect this threshold question — whether a series of transactions is sufficiently interlinked to be treated in aggregate — to remain the principal battleground in future fraudulent conveyance litigation involving multi-step Dutch restructurings, rather than the now-settled question of how knowledge is assessed once that threshold is met.

This update is for informational purposes only and does not constitute legal advice. No attorney-client relationship is created thereby.