With respect to the dynamic course of events regarding COVID-19 – commonly known as the coronavirus – we address the threat of insolvency and related liability of the statutory bodies (Directors) and provide a list of practical mitigating steps

Much has already been written about the proposal for the “Second Chance” directive (“Proposal“) published in November 2016 which is still being debated by the EU bodies – and rightly so. Harmonisation of insolvency law across the EU is needed as one in four insolvency proceedings is a cross-border insolvency and creditors need to know what to expect in other EU countries and that the courts and practitioners cooperate in an efficient way.

ENEFI Energiahatékonysági Nyrt v Directia Generala Regionala a Finantelor Publice Brasov (DGRFP) [2016] All ER (D) 110 (Nov)

The Court of Justice of the European Union ("ECJ") has handed down a notable judgment in the case of ENEFI Energiahatékonysági Nyrt v Directia Generala Regionala a Finantelor Publice Brasov (DGRFP) [2016] All ER (D) 110 (Nov), ruling that domestic laws governing forfeiture of a claim in insolvency proceedings apply to foreign creditors too.

A recent decision of the Slovak Courts suggest that if main proceedings have been opened in one member state and the debtor has assets in Slovakia, the insolvency practitioner in the main proceedings must act quickly and sell those assets before secondary proceedings are opened in Slovakia, otherwise he runs the risk of losing the assets to the secondary estate. Legal title to the assets must have passed to the buyer before the secondary proceedings are opened; it is not enough just for contracts to have been exchanged.

Doing Business in the Slovak Republic 2016 Doing Business in the Slovak Republic 2016 Preface Since gaining its independence in 1993, the Slovak Republic has been adopting new laws at a rapid pace. As a country in transition, its legal system continues to develop. Therefore, the Prague office of Baker & McKenzie and its Slovak counsel Marek & Partners have prepared the document Doing Business in the Slovak Republic as a general guide for any company or individual considering an investment in the Slovak Republic.

Capital markets are the platform on which buyers and sellers, including both individuals and businesses, buy and sell financial securities, such as stocks, bonds and related debt and equity instruments. Capital markets help channel surplus funds from savers to institutions by facilitating an open, transparent and safe environment in which to trade securities. Capital markets consist of primary markets on which new issues of securities are traded, and secondary markets, on which existing or previously-issued securities are traded.

Slovakia is getting ready for a major amendment of the Commercial Code, which will also amend the Slovak Act on Bankruptcy and Restructuring. Significant changes are expected in the corporate as well as bankruptcy and restructuring law sector which is underperforming and provides insufficient protection to creditors, despite many previous attempts to improve the regulation of this area.

At the end of April 2015 the National Council of  the Slovak Republic adopted Act No. 87/2015  Coll., which amends and supplements Act No. 513/1991 Coll. Commercial Code, as amended, and also amends and supplements certain acts (the Amendment). The Amendment will significantly affect the content of the corporate law in Slovakia.

The new “company in crisis” special regime will become effective on 1 January 2016. It applies to limited liability companies, joint-stock companies and limited partnerships in which the general partner is not an individual.

A company is deemed to be in crisis when it is insolvent (within the meaning of the Insolvency Act) or at risk of becoming insolvent, which is the case if a company’s equity (registered capital, reserve fund, other capital funds, etc.) to debt ratio is lower than 4/100. This will increase to 6/100 on 1 January 2017 and to 8/100 the year after.

The Existing System

Despite its introduction to the Slovak legal system in 2006, current laws on debt relief within the framework of bankruptcy of natural persons have not been a viable solution.

Basing the legal institute of debt relief on a two-step procedure:

• starting with bankruptcy (i.e. liquidation of (all) the debtor’s assets)
• then followed by a three-year trial period at the end of which the court releases a resolution on the possibility of personal bankruptcy

has in fact hindered debtors from filing.