PETERS/VRIESENDORP concursus creditorum occurs (i.e, there are competing creditors), additiona measures have to be taken. In this context. however. it should be noted that insolvency -the fact that a debtor's liabilit ies exceed its assets-in itself does not decide the question of whether or not a bankruptcy must be declared. What counts in the Netherlands is a liquidity test: if a debtor can no longer meet its current, due debts, the court may dechre it-either at the request of a creditor or at its own request20-to be in a state of bankruptcy. This criterion is based on Arts. I and 6 Bankruptcy Ac which refer to the debtor who Ais in a state of having ceased to pay its debts. This is a situation of insolvency within the substantive meaning of the aw. Although this implies an investigation by an impartial judge, in practice, it is a limited examination, with the judge restricting himself to briefly checking whether the substantive requirements for declaring a bankruptcy have been met. 3.3 The purpose ofthe bankruptcy The aim of the bankruptcy is to arrive at an orderly winding-up of the concursus creditorum with regard to the insufficient estate. To this end, the court appoints an dependent curator(bankruptcy trustee, usually a specialized lawyer), who, under the supervision of a rechter-commissaris(bankruptcy judge )also appointed by the court, takes care of the administration and winding-up of the bankrupt estate. The starting-point in the division is equality of the cred itors(pari passul-principle), in the sense that, in principle, every creditor must be paid in proportion to his claim. In practice, however, such-competing-creditors will rarely receive any payment on their claim. If anything is left at all after the secured creditors(financiers with rights of pledge and mortgage; purveyors with title retention) have been paid, then deduction of all the bankruptcy costs, the preferential creditors, such as the inter revenue, socal premiums, and staff pensions and salaries, are paid first and leftovers are paid to the unsecured creditors The above applies to all debtors. Although one may in the first place think of private entities that, on the basis of legal rules, are declared to be in a state of bankruptcy, we note that the aw does not make an exception forpublic legal entities This means that a court must apply the same criteria when it happens to be confronted with a bankruptcy petition conceming a public legal entity as a defaulting debtor. If this entity is in a situation in which it has ceased to pay its debts, the court as to declare it bankrupt Consequences of the bankruptcy Ifa legal entity is declared to be in a state of bankruptcy, a bankruptcy trustee-under the supervision of a bankruptcy judge- will deal with the administration and winding-up of the bankrupt estate. The question arises how this intervention relates the public character of the bankrupt legal entity. It is unclear, for example, to what extent the bankruptcy trustee can deal with adm inistrative disputes that might have financal consequences forthe estate(for example, subsidy disputes); whether he can Pursuant to Art. I Bankruptcy Act it I among the Publi Prosecutor's options to provoke a bankruptcy order for reasons ofpublic interest, but in practice this hardly occursPETERS/VRIESENDORP 8 concursus creditorum occurs (i.e., there are competing creditors), additional measures have to be taken. In this context, however, it should be noted that insolvency - the fact that a debtor's liabilities exceed its assets - in itself does not decide the question of whether or not a bankruptcy must be declared. What counts in the Netherlands is a liquidity test: if a debtor can no longer meet its current, due debts, the court may declare it - either at the request of a creditor or at its own request20 - to be in a state of bankruptcy. This criterion is based on Arts. 1 and 6 Bankruptcy Act, which refer to the debtor who Ais in a state of having ceased to pay its debts. This is a situation of insolvency within the substantive meaning of the law. Although this implies an investigation by an impartial judge, in practice, it is a limited examination, with the judge restricting himself to briefly checking whether the substantive requirements for declaring a bankruptcy have been met. 3.3 The purpose of the bankruptcy The aim of the bankruptcy is to arrive at an orderly winding-up of the concursus creditorum with regard to the insufficient estate. To this end, the court appoints an independent curator (bankruptcy trustee, usually a specialized lawyer), who, under the supervision of a rechter-commissaris (bankruptcy judge) also appointed by the court, takes care of the administration and winding-up of the bankrupt estate. The starting-point in the division is equality of the creditors (pari passu-principle), in the sense that, in principle, every creditor must be paid in proportion to his claim. In practice, however, such - competing - creditors will rarely receive any payment on their claim. If anything is left at all after the secured creditors (financiers with rights of pledge and mortgage; purveyors with title retention) have been paid, then, after deduction of all the bankruptcy costs, the preferential creditors, such as the internal revenue, social premiums, and staff pensions and salaries, are paid first and any leftovers are paid to the unsecured creditors. The above applies to all debtors. Although one may in the first place think of private entities that, on the basis of legal rules, are declared to be in a state of bankruptcy, we note that the law does not make an exception for public legal entities. This means that a court must apply the same criteria when it happens to be confronted with a bankruptcy petition concerning a public legal entity as a defaulting debtor. If this entity is in a situation in which it has ceased to pay its debts, the court has to declare it bankrupt. 4 Consequences of the bankruptcy If a legal entity is declared to be in a state of bankruptcy, a bankruptcy trustee - under the supervision of a bankruptcy judge - will deal with the administration and winding-up of the bankrupt estate. The question arises how this intervention relates to the public character of the bankrupt legal entity. It is unclear, for example, to what extent the bankruptcy trustee can deal with administrative disputes that might have financial consequences for the estate (for example, subsidy disputes); whether he can 20. Pursuant to Art. 1 Bankruptcy Act, it is among the Public Prosecutor's options to provoke a bankruptcy order for reasons of public interest, but in practice this hardly occurs