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commenced against the debtor to enforce a pecuniary claim. There are two different types of preventive restructuring – public and non-public. Public preventive restructuring in principle deals with all monetary liabilities (except those of “unaffected creditors”, e.g., a small creditor with a claim in the amount up to EUR 5,000, persons with an employment claim against the debtor, non-monetary creditor, etc.), while non- public preventive restructuring deals only with the claims of licensed creditors (e.g., banks, leasing companies).
• Consultant The legal and/or economic steps to be taken during preventive restructuring often go beyond the experience of the usual course of business of the debtor and therefore, it is obligatory (with a few legal exceptions) to engage a professional consultant. The debtor may choose one or more consultants, usually lawyers, investment/economic advisors, which can be found inter alia on the list published on the website of the Ministry of Economy of the Slovak Republic. The consultant supports the debtor while preparing the restructuring plan, continuously monitors the debtor’s economic situation and development trends and replies to creditors’ questions. The consultant is required to act with professional care and is liable for damages towards the debtor and the creditors for which he/she must arrange professional liability insurance. Once the court approves the public preventive restructuring the consultant(s) is usually replaced by a trustee appointed by a court. • Information on bankruptcy The debtor's statutory body is obliged to inform the court, the trustee, the creditors' committee, and the creditors who gave their consent to temporary protection, of the debtor's bankruptcy occurring during the public preventive restructuring. Nevertheless, preventive public restructuring is not automatically suspended in such case, provided that it can be reasonably assumed that the debtor will be able to fulfil properly and in a timely manner all new obligations and the restructuring plan will be confirmed by the court, or the debtor will avoid bankruptcy in another way. Breaching this obligation by a statutory body (directors, members of the BoD) is sanctioned by
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The preventive restructuring must be submitted by the debtor to the court. The debtor must be registered in the Register of Public Sector Partners (all companies doing business with state, municipalities or state/municipality application for public organisations must be registered in this register. Verifying ownership structures up to UBOs is part of registration process) at the time of the submission of the application. The application must include a draft restructuring plan with the proposed measures aimed at averting the debtor's insolvency and to ensure the viability of the debtor's business. A creditors' committee for the debtor is appointed by the court after the authorization of public preventive restructuring. The creditors' committee has the power to determine the debtor’s acts, which are subject to the approval of the creditors' committee or a designated consultant, and to approve such acts. If the court has granted public preventive restructuring, the debtor is entitled to reapply no earlier than two years after the end of the preventive restructuring.
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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