BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN SLOVAKIA]
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limit it are also prohibited unless approved by the creditors' committee. After the preventive public restructuring has been authorised, the consultant shall be replaced by an appointed trustee if the debtor or a majority of the creditors so propose or if the debtor is granted temporary protection. Temporary protection Together with the application for authorisation of a public preventive restructuring, the debtor may also apply for “temporary protection ” , which provides time and material space for effective restructuring, this institute is also regulated by the Act. The court may grant the debtor a temporary protection for a period of three months. If the creditors so agree the court shall extend temporary protection for a further three months; the total duration of temporary protection granted may not exceed 6 months. The creditors who must agree with the granting of the temporary protection are:
The debtor is obliged to limit his activities to acts during the temporary protection, which do not materially alter the composition of his assets, liabilities or obligations (other acts only with the consent of the creditors' committee). Effects of temporary protection: a) active bankruptcy immunity - The debtor is not obliged to file for bankruptcy proceeding during the temporary protection; this is without prejudice to the information obligation of the debtor's statutory body to inform the court, creditors on the bankruptcy. b) passive insolvency immunity - During the period of temporary protection, the debtor cannot be declared bankrupt or restructured, the proceedings are suspended c) relative execution immunity - no enforcement proceedings can be brought against the debtor (except for statutory claims) d) priority of the satisfaction of new and unrelated liabilities (does not apply to claims of the debtor's employees from employment relations) e) temporary impossibility to exercise security rights related to the property of debtor (does not apply to claims of the debtor's employees from employment relations) f) prohibition of set off a related-party claim against the debtor (related claims of debtor's statutory body, proxy, a person who has a qualifying holding in a legal person - debtor), this equally applies to unilateral set- off or set-off based on an agreement with the debtor. g) restriction on change of content and termination of contractual relations - In case of a default of the debtor which
majority calculated according to the amount of their outstanding claims; or of creditors,
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• at least 20 % of all creditors, calculated according to the amount of their outstanding claims, and in the concept plan the partial remission of the claim or the recognition of its partial unenforceability does not exceed 20% of any creditor's claim and the deferral of repayment of any claim does not exceed one year. For the purposes of determining the amount of the claims, the interim accounts which the debtor is required to draw up for that purpose as at a date not more than 60 days have elapsed at the time of the application shall be taken into account, the consents of the creditors of the related claims shall not be taken into account.
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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