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An amendment to the Slovak Insolvency Code has been recently approved by the Parliament (the “Amendment“). The Amendment, which is considered to be the most significant amendment to the current Slovak Insolvency Code since its introduction back in 2006, seeks to revise those provisions of the Insolvency Code that have proven to be problematic in their application, or less effective than originally intended.
The Slovak Insolvency Code requires an insolvent company and its director to file a petition for insolvency proceedings within 30 days from the date it becomes aware (or, should have become aware, acting with due care) of the company’s insolvency. This obligation, if breached, may give rise to liability on the part of the company’s director to creditors for damages. In particular, creditors may claim damages in the amount of their claims which remain outstanding following the termination or abandonment of the insolvency proceedings due to insufficient assets, unless evidence to the contrary (i.e. evidence that the director acted indeed with due care) is submitted. Nevertheless, in the past it has not been common practice in Slovakia (despite the increasing number of bankruptcy proceedings) that such claims are made against directors.
Kinstellar Bratislava is actively involved in various restructuring and insolvency work in Slovakia. We provide legal advice to our clients who are mainly shareholders or creditors of indebted businesses but we are also engaged in advising companies in financial difficulties in order to help them tailor their restructuring scenarios and manage creditor negotiations. In addition, Kinstellar Bratislava also provides restructuring and insolvency services through an officially authorised bankruptcy and restructuring trustee in Slovakia.
With some exceptions, the new provisions of the Amending Act will enter into force on 1 September 2009 and the new provisions will apply to the proceedings launched after that date.