BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN SLOVAKIA] 84
reasonable to assume that at least a substantial part of the business of the debtor's business is maintained, and in the case of restructuring proceedings, it is reasonable to assume that the debtor's creditors are more satisfied than in the case of bankruptcy. A restructuring proceeding is a strictly defined process, which is aimed at rescuing a debtor, where the debtor agrees with all creditors to settle their claims and maintains the next operation of the debtor's business including employment, even after the restructuring has ended. A debtor who is a legal entity is obliged to file for bankruptcy proceedings within 30 days from the day it ascertained or, if exerting professional care, could have ascertained its bankruptcy (both in the case of insolvency and over indebtedness). A person obliged to file for bankruptcy in the debtor's name (e.g., a statutory body or member of the debtor's statutory body, the debtor’s liquidator and the debtor’s statutory representative) failing to comply with such obligation must pay a penalty of EUR 12,500 and is liable for damages towards the debtor and its creditors. Unless a different amount of damage is proved, the creditor shall be presumed to have suffered damage to the extent that the creditor's claim has not been satisfied after the bankruptcy proceedings have been discontinued for lack of the debtor's assets, the bankruptcy declared on the debtor's assets has been annulled for lack of assets, or the execution or similar enforcement proceedings against the debtor have been discontinued for lack of assets. A penalty is enforced by the bankruptcy trustee and its non-payment leads to entering such person into the Register for Disqualifications. The creditor is also entitled to file a bankruptcy petition, if it can reasonably assume insolvency of its debtor or if the debtor is presumed to be
bankrupt due to the publication of a notice in the Commercial Bulletin (e.g., a notice of dissolution of a company, notice of termination of the enforcement proceeding). Unlike in the case of preventive restructuring proceedings, both restructuring proceedings and bankruptcy proceedings resolve all of a debtor's claims. Both proceedings are very strict, formal and lengthy. Restructuring proceedings in Slovakia last approximately one year and bankruptcy proceedings even several years. It is not uncommon that the restructuring proceedings are unsuccessful, the process does not lead to the debtor's recovery and only extends the time gap between the start of the economic problems and entering into bankruptcy proceedings, and consequently even decreases the creditors' satisfaction rate. Bankruptcy proceedings always lead to termination of the activity of the legal entity, since the debtor is deleted from the Commercial Register, and it ceases to exist as the legal entity after the scope of the application is fulfilled. (5) Bankruptcy trustee Apart from “standard” bankruptcy trustees, Act No. 8/2005 Coll. o n Bankruptcy Trustees recognizes so-called special bankruptcy trustees who shall be appointed to manage large bankruptcy or restructuring proceedings (with a large number of creditors, with a large number of employees, or with a large volume of assets, etc.) or bankruptcy or restructuring proceedings of special entities (e.g., financial institutions).
This overview is for information purposes only.
Under no account can it be considered as either a legal opinion or advice on how to proceed in particular cases or on how to assess them. Should you need any further information on the issues covered by this overview, please contact Ms. Kristína Ňaňková (nankova@peterkapartners.sk ) or Ms. Nicole Šrolová (srolova@peterkapartners.sk).
PETERKA & PARTNERS is a full-service law firm operating
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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