[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN CZECH REPUBLIC] 33
delivered before the insolvency court granted the moratorium. During the moratorium, the set-off of mutual claims between the debtor and creditor is not permitted, unless the insolvency court allows it by means of an interim measure. The purpose of this restriction is to protect the debtor's cash flow, ensuring that they can continue to operate and implement measures to restore their business to financial health. The moratorium expires at the end of the period for which it was declared. It can also be revoked earlier by the insolvency court, at the motion of a majority of creditors according to the amount of their claims. The court may also revoke the moratorium if it finds that the debtor provided false information in the moratorium motion or if it becomes apparent that the debtor had dishonest intentions (e.g., preferential payment
Identifying the debtor's assets,
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• Drawing up an inventory of those assets,
• Verifying and disputing the creditors' claims, • Gradually liquidating the insolvency estate, • Implementation of the reorganisation plan, and, • Submitting a written report on the status of the insolvency proceedings at least once every three months. Submitting Claims in Insolvency Proceedings Creditors assert their claims in insolvency proceedings by filing an application. The deadline for filing an application is specified in the declaration of insolvency, which is usually set at two months. Claims filed after this deadline are not considered by the insolvency court and these claims are not satisfied in the insolvency proceedings at all. The application must contain a specification of the claim (maturity, enforceability, subordination, and whether it is a secured claim) and a brief description of the claim. The claim must always be quantified in monetary terms (in Czech crowns) in the application. Registered claims are reviewed in a hearing before the insolvency court, whereby the insolvency trustee, the debtor and the registered creditors may dispute the authenticity, amount, and priority of the claims. A claim's authenticity is disputed if it is argued that the claim did not arise, has already been completely extinguished or is completely time- barred. The amount of a claim is disputed if it is argued that the debtor's obligation is lower than the amount filed. A claim's priority is disputed if it is argued that it has a lower priority than
to only some creditors). The Insolvency Trustee
The insolvency trustee is appointed by the insolvency court from an official list maintained by the Ministry of Justice. When performing their duties, they must be impartial and independent, and meet the general, and qualification, requirements for inclusion on the insolvency trustee list. The insolvency court shall appoint an insolvency trustee in a declaration of insolvency. In certain cases, even before the declaration of insolvency, the insolvency court may appoint an interim insolvency trustee. At the first creditors' meeting the creditors can recall a court-appointed insolvency trustee and appoint a new one, without having to give reasons for such resolution. The insolvency court may remove the insolvency trustee if the trustee breaches their duties. The main tasks of the insolvency trustee include:
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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