BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN SLOVAKIA] 78
KEY FACTS OF BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS UNDER SLOVAKIAN LAW
We present here the following answers to the questions mentioned in the ILN Restructuring & Insolvency Collaborative Paper which reflect the regulations in the Slovak Republic. We have dealt with proceedings related to a business company in the position of debtor. We mostly focused on the regulation of preventive restructuring proceedings introduced into Slovak commercial law in 2022. Should you have any questions, or issues to discuss, please do not hesitate to contact us. We would gladly answer your questions.
payment term was postponed or extended during the company‘s crisis) by inter alia a member of the statutory body, proxy, director of the branch, or member of the supervisory board, by a person/entity whose direct or indirect share represents as least 5 percent of the registered capital or on the voting rights or he/she has a similar influence on the company or a person acting on their behalf. Unless otherwise is proven, it is assumed that any performance provided by a person where it is impossible to identify the final beneficiary is considered “performance replacing own resources". Periods for the return of “performance replacing own resources” are suspended during the periods when it cannot be returned due to the mandatory provisions of Slovak commercial law. If the “performance replacing own resources” is returned to the creditor despite the statutory prohibition, members of the statutory body (e.g. directors, members of the BoD) who held office at the time the performance was provided and those who held offices as the members of the statutory body in the period in which the company did not claim the return of the performance shall be jointly and severally liable for its return towards the company as well as the company’s creditors. Another aspect of holding company law included in the Slovak Commercial Code is that a controlling person, i.e. a person who holds a majority of the voting rights either by virtue of ownership of a business share or by virtue of a shareholders’ agreement, is liable to the creditors of the controlled person for damage caused by the bankruptcy of the controlled person, provided that the controlling person's conduct considerably contributed to the bankruptcy of the controlled person. The
Presentation
of
preventive
restructuring/bankruptcy/restructuring proceedings in the Slovak Republic and their main differences. In Slovakia, there are several ways to avoid the imminent bankruptcy or insolvency of a debtor and ways to proceed. (1) Higher creditor’s protection under Commercial Code A special regime is applied to a business company that is in crisis. A company is “in crisis”, if it is technically in bankruptcy or bankruptcy is imminent or if its equity to liabilities ratio is less than 8 to 100. A company may not return the “performance replacing (the company’s) own resources” along with interest and contractual fines, if it is in crisis, or if it would fall into crisis as a result of such performance. “Performance replacing own resources” includes providing a credit facility (for a period of at least 60 days) or other similar performance with the same economic effect on the company during its crisis (or even before its crisis, if the
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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