BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN SLOVAKIA] 83
who has a qualifying holding in a legal entity – debtor); g) Restriction on change of content and termination of the contractual relations – In case of the debtor’s default, which occurred before temporary protection was granted, the creditor may not (over the duration of the temporary protection) terminate the contract, withdraw from the contract, refuse performance under the contract or change the content of the rights or obligations under the contract (the exception is a performance by the other party which is not to be used in connection with the ordinary course of the debtor's business); h) Impossibility to terminate the debtor's financing – The financing agreed between the creditor and the debtor prior to the providing of a temporary protection cannot be terminated during the temporary protection due to the debtor's failure to comply with the terms of the financial ratios. The debtor cannot draw on the financing agreed before the temporary protection was granted without the approval of the creditors' committee; i) Suspension of limitation periods for the time-barring of claims. The debtor may accept crisis financing during the temporary protection, subject to the consent of the creditors' committee, up to a
maximum amount of 6 months of the average debtor's monthly operating costs for the previous year. (4) Restructuring and Bankruptcy proceedings Act no. 7/2005 Coll. On Bankruptcy and Restructuring as amened recognizes two forms of bankruptcy: • Insolvency – a legal entity is insolvent, if it is unable to fulfil at least two monetary obligations to more than one creditor 90 days after their due date. The debtor shall be deemed insolvent, if a monetary obligation cannot be collected through the enforcement; • Over indebtedness – An entrepreneur is overindebted if he/she has more than one creditor and the value of his/her liabilities 9 exceeds the value of his/her assets. If the debtor finds out that the above criteria are met, so it is bankrupt (contrary to imminent insolvency that may be dealt with within the preventive restructuring proceeding), it may decide for formal restructuring proceedings and entrust the restructuring trustee with the preparation of a restructuring opinion to determine whether the restructuring requirements and conditions are fulfilled. If not, they must file for initiation of bankruptcy proceedings . The restructuring administrator may recommend restructuring of the debtor, if it is management of the legal entity that is comparable to the influence corresponding to such share; c) the statutory body or a member of the statutory body, manager, proxy, or a member of the supervisory board of the legal entity stated in paragraph b), d) a close person of a natural person stated in paragraphs a) through c), e) some other legal entity in which the legal entity or any of the parties stated in paragraphs a) through d) has a qualified participation.
9 The sum of the subordinated claims and claims of related parties shall not be included in the calculation.
A related party is:
a) the (member) statutory body, manager, proxy, or a member of the supervisory board of the legal entity, b) a natural person or some other legal entity that has a qualified participation in the legal entity; qualified participation shall mean a direct or indirect share equal to at least 5% of the registered capital of the legal entity or of the voting rights in the legal entity or an option to exercise the influence on the
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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