BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN SLOVAKIA] 99
KEY FACTS OF BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS UNDER SLOVAKIAN LAW Presentation of the preventive restructuring/bankruptcy/restructuring proceedings in the Slovak Republic and their main differences.
- any performance (loan or other performance) provided to the company by the so-called “controlling person” (e.g., member of the statutory body/supervisory board, a person who holds a direct or indirect share representing at least 5% of the company’s registered capital or voting rights in the company, silent partner…) - any performance (loan or other performance) provided by the company where it is impossible to identify the ultimate beneficial owner • Exercise of a creditor's right from the claim secured by a controlling person of the debtor During a crisis, a creditor may satisfy his claim secured by a guarantee, pledge or other security provided by the controlling person without first having to enforce its right against the company. Any different contractual arrangement shall be disregarded. If the creditor was aware of the fact that the company was in crisis, he can satisfy his claim secured by a controlling person only up to the difference between the amount of the claim and the value of the security. • Periods for the return of company’s own capital replacing performance are suspended during crisis. The value of the performance provided in breach of the prohibition shall be returned to the company. Members of the statutory body who held office at the time performance was provided and those who held office as a member of the statutory body in the period in which the company did
In Slovakia, there are several possibilities how to avoid the imminent bankruptcy or insolvency of a debtor and how to proceed. (1) Increased preventive creditor protection under Commercial Code in a state of crisis According to the Commercial Code, the Company is in crisis, if it is bankrupt or bankruptcy is imminent, if it is in a period of dissolution after going into liquidation, or and if the ratio of its own equity to its liabilities is less than 8 to 100 . Whether a company is in crisis depends on the state of its accounts, namely the most recently drawn up annual or extraordinary financial statements. If a company is in crisis there are several consequences for the company: • Prohibition on the return of company’s own capital replacing performance if a company is in crisis or if it should enter into a crisis as a result of such performance (together with accessories and contractual penalties) The law defines a company’s own capital replacing performance as: - a loan or a similar performance for a corresponding economic purpose provided to the company in a state of crisis for a period longer than 60 days; - any performance provided to a company before the crisis, whereas the maturity of this performance was postponed or prolonged during the crisis, such as prolongation of maturity of an invoice; or
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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