The Bottom Line
- Restructuring is Not a Barrier: Companies can undergo corporate restructuring, such as creating a holding/operating company model, without forfeiting their valuable track record for public tenders.
- Control Over Assets, Not Ownership, is Key: A subsidiary can rely on its parent’s experience if it has effective control over the necessary personnel and resources, like vehicles or equipment, even if those assets are leased from the parent and not owned directly.
- Operational Continuity Matters: The court emphasized that the new entity was a direct continuation of the old one, inheriting all staff, know-how, and ongoing contracts. This operational continuity was more important than the legal form of asset ownership.
The Details
The case centered on a public tender for student transportation issued by Jobinder, a mobility agency in the northern Netherlands. The winning bidder, TVZ B.V., had recently been formed through a corporate restructuring. Its predecessor company had been renamed Veenstra Groep B.V. (becoming the parent/holding company) and had transferred its entire business operation—all staff, contracts, and know-how—to the newly created TVZ B.V. (the operating company). When bidding, TVZ used a reference project that had been successfully completed by its predecessor. The second-place bidder challenged this, arguing that the new TVZ was a separate legal entity and could not claim the experience of another company as its own.
A lower court initially agreed with the challenger, creating significant uncertainty for businesses. The judge ruled that because TVZ did not take ownership of all assets—specifically, the fleet of buses remained legally owned by the parent company and was leased to TVZ—it could not be seen as a complete continuation of the original enterprise. This narrow interpretation suggested that common asset-holding structures could prevent new operating companies from leveraging their group’s historical performance in competitive bids, effectively wiping the slate clean after a restructuring.
The Court of Appeal in Arnhem-Leeuwarden decisively overturned this ruling, adopting a far more pragmatic and business-friendly approach. The higher court determined that the decisive factor is not the legal title to every asset, but whether the bidding company has effective disposal over the capabilities that delivered the past performance. Since TVZ took over the entire operational side of the business and had a formal lease agreement guaranteeing its access to the necessary buses, it was clear that the same team, with the same resources and expertise, would be performing the new contract. The court recognized that separating asset ownership in a holding company from the operational activities in a subsidiary is a standard and legitimate business practice.
Source
Gerechtshof Arnhem-Leeuwarden
