A Creditor did not register his claim against a debtor in insolvency proceedings due to missing information concerning the publication of the debtor's bankruptcy in the Insolvency Register. The creditor regularly searched for information regarding the debtor´s potential bankruptcy in the insolvency register and was always informed that a resolution on the debtor´s bankruptcy had not been made.

A Creditor registered his claim into insolvency proceedings against the debtor within 30 days of the  publication of the resolution on the debtor's bankruptcy in the insolvency register. The Creditor´s insolvency application regarding the claim was refused by the insolvency court because the resolution on the debtor´s bankruptcy had been previously published in the file of the debtor’s spouse’s  insolvency proceedings.

On 5 March 2013, the Government submitted a groundbreaking bill amending Act No. 182/2006 Coll. on bankruptcy and settlement (the Insolvency Act) and Act No. 312/2006 Coll. on insolvency administrators to the Chamber of Deputies of Czech Parliament, which approved the bill on 8 August 2013.

The objective of the proposed legislation is not only to reflect changes arising from private law recodification, but also to comprehensively revise proablem areas in existing insolvency proceedings legislation.

In its decision of 11 July 2013, Reference No. 21 ICdo 21/2012, the Supreme Court of the Czech Republic comprehensively expressed its opinion on the substantive legal aspects of re-pledging a receivable burdened by a lien and the possibility of negotiating a contractual waiver of re-pledging receivables. According to the decision, the pledging of a receivable does not preclude the possibility of establishing another lien on the same receivable. This decision is crucial for pledgees, typically financing banks.

Case background

In the current climate, the demand for jobs substantially exceeds the supply. Even so, for employers it can still be difficult to find a quality employee who meets the specific requirements for the given job. Once a suitable employee is found for the vacant position, they complete the usual formalities – submitting documents on their education, health and evidence of criminal records, agree with the employer on wages and other conditions of the employment and sign the labor contract.

In the last week of January, the Czech Government passed an amendment to the Insolvency Act, which was prepared by the Ministry of Justice. The aim of the amendment is to respond to the growing widespread practice of the filing of unjustified insolvency petitions by creditors. The amendment intends to allow courts to reject such petitions.

During the current economic downturn the number of insolvency proceedings in the Czech Republic continuously increases. The insolvency legislation plays a key role in insolvency proceedings. Given the tough conditions on the market, we are witnessing higher numbers of bullying insolvency petitions submitted against debtors.

The Czech Parliament passed an amendment to the Code of Civil Procedure (Act No. 99/1963 Coll., as amended) and the Act on Execution Procedure (Act No. 120/2001 Coll., as amended). Most of the provisions of the new legislation will be effective as of 1 January 2013. The amendment will, among other things, significantly modify the rules on enforcement of claims in the Czech Republic, as it changes some of the existing methods of enforcement under Czech law as well as introducing new ones.

In the September, 2006 issue of Insolvency Notes, the effect of the overhaul of the bankruptcy laws in the Czech Republic was discussed. As was the case at that time, the new insolvency laws were to become effective July 1, 2007. It now appears that the effective date will be delayed. The lower house of Czech Parliament gave fast-track approval recently to a bill for delaying implementation of the new bankruptcy act by six months, to January 1, 2008. Senate and presidential approval is still needed.

When a debtor, natural or legal person, is constituted in serious circumstances of insolvency in the face of a plurality of creditors, the legislator has foreseen as a mechanism to solve said problem three alternatives of action, depending on the qualities of the insolvent person: the insolvency creditors, bankruptcy and suspension of payments.