September 2016 CMS_LawTax_Negative_28-100.eps Enforcing Security over Real Estate and Shares across Europe 2 | Enforcing Security over Real Estate and Shares across Europe 3 Introduction 4 Albania 5 Austria 6 Belgium 7 Bulgaria 8 Czech Republic 9 England and Wales 10 France 11 Germany 12 Hungary 13 Italy 14 Luxembourg 15 Montenegro 16 Netherlands 17 Poland 18 Portugal 19 Romania 20 Russia 21 Scotland 22 Serbia 23 Slovakia 24 Slovenia 25 Spain 26 Turkey 27 Ukraine 28 Contacts Contents 19 practice and sector groups working across offices Ranked 2nd most global law firm in the Am Law 2015 Glob
Summary
The new Act CV of 2015 on debt settlement procedure for private individuals provides an opportunity for debt settlement both outside and within the scope of a court procedure.
Major parties to the procedure:
Shareholders who fail to intervene to stem the losses in a company they control may be held personally liable for the company’s debts if it is subsequently liquidated, according to the Supreme Court.
Under Hungarian law, a shareholder’s liability (in a limited liability company) is usually limited to their capital contribution. The corporate ‘veil’ can only be pierced (making the shareholder personally liable for the company’s debts) in special circumstances.
A new electronic database of bankruptcy and liquidation petitions, open to any company, is being set up by the National Judicial Office.
This will enable any company to obtain a certificate showing whether it has had a bankruptcy or liquidation petition filed or liquidation proceedings initiated against it (but in each case not yet finally decided).
The introduction of the database and certificate system into the Bankruptcy Code is the result of concerted lobbying by the American Chamber of Commerce in Hungary and CMS Budapest Office.
Hungary has passed an Act that implements EU Directive 2019/1023 on preventive restructuring frameworks, the discharge of debt and disqualifications, and on measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt (amending EU Directive 2017/1132). This new Act was published in Hungary's Official Gazette on 3 June 2021 and will come into force on 1 July 2022.
The Hungarian government has recently introduced a new restructuring tool with the aim of supporting companies suffering from financial difficulties due to COVID-19.
Financially distressed companies will receive an automatic stay while the company puts together a reorganisation plan, which will be supervised by a court and evaluated by a court-appointed expert.
The Hungarian National Bank (MNB) has issued its updated management circular for the treatment of outstanding loans affected by legislative moratoria.
In line with the European Banking Authority (EBA) position, the MNB states that it not necessary to automatically qualify a customer loan as being defaulted or restructured (and thus the creation of higher provisions is not necessary) if the loan fell under the Hungarian legislative moratoria for up to nine months prior to the expiry date of the second moratorium on 30 June 2021.
Short stories
Amendments to the Czech Insolvency Act 2016
Changes to Hungarian bankruptcy law mean that priority will be given to creditors who pledge property as security or collateral. Minor changes to Hungarian corporate legislation require companies to list specific court registration information on their official correspondence and websites.
Introduction