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VanMoof bankruptcy: 'Filing charges won't help affected customers'

Amsterdam-based bicycle company VanMoof was declared bankrupt in court this week. The company had been struggling with financial problems for some time and recently closed its doors, causing great concern among customers. Several affected customers whose newly bought or repaired bikes were still being kept in one of the stores reported them as stolen to the police. Jessie Pool’s research focuses on balancing interests in bankruptcies and she explains how bankruptcy works, and why reporting their bikes stolen will not help affected customers.

What can VanMoof customers expect from the bankruptcy?

'When a company is declared bankrupt, the court appoints one or more insolvency practitioners who are responsible for handling the bankruptcy. In short, the task of the insolvency practitioner is to liquidate the bankrupt company's assets and distribute the proceeds to the joint creditors. At the moment, the practitioners will be busy investigating whether a possible relaunch of (part of) the company is among the possibilities. A relaunch generally results in higher proceeds than a piece-by-piece liquidation of all assets. Moreover, a relaunch might be beneficial for affected customers, for instance if the ‘relauncher’ intends to continue VanMoof's services.'

Why is filing charges of little use for affected customers?

'Bankruptcy is a civil matter. Affected customers are considered to be 'ordinary' creditors and will therefore have to file their claim with the insolvency practitioner. That means it is uncertain whether they will be able, for instance, to get their down payment for a new bike back. Although this is very unpleasant for customers, bankruptcy and the likelihood that down payments will not be refunded are not something for which you can file criminal charges.'

Can you relate to customers being angry about this state of affairs?

'With these kinds of bankruptcies, you often notice a sense of injustice and powerlessness among customers about the course of events and a desire to recover damages from someone, often the entrepreneurs themselves. I think the filed charges are also based on that feeling of injustice, but a bankruptcy is not necessarily someone’s fault. Although this does not mean that bankruptcy renders entrepreneurs completely unaccountable for any wrongdoing. Insolvency practitioners are obliged to investigate what caused the bankruptcy which includes investigating whether so-called 'irregularities' took place.

Something else that keeps popping up in the coverage I have read so far, is that it would be unfair for customers to have to join the very back of the queue because other creditors such as the tax authorities or banks have a prior claim. I understand that it is very annoying for customers who may have lost thousands of euros that they will probably never see again, but that is the way bankruptcy is organised in the Netherlands. Incidentally, there are increasing calls to give more attention to vulnerable creditors such as customers in balancing interests in bankruptcies, partly in the context of the debate on socially responsible liquidation, but of course this will be of no use to VanMoof's customers.'

Image by Frankie Lopez via Unsplash

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