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.

Summary

Are you already a board member or executive of a Slovak company or about to become one? If so, you should know about the proposed amendment to the Slovak Commercial Code. The amendment aims to address the so-called “white horses” and “tunneling (asset stripping)” of the companies.

Background

New rules strengthen the position of individual creditors and weaken the concept of insolvency proceedings as a means of final collective satisfaction of creditors. Taylor Wessing in Bratislava, as an advisor to the Ministry of Justice, has been actively involved in the creation of this new regime.

New provisions

Do you know the new rules?

The alarming increase in "speculative mergers" and the increasingly frequent occurrence of strawmen in commercial companies' management structures has long been seen as a major obstacle on the Slovak market. In response, the Ministry of Justice of the Slovak Republic has amended the Commercial Code to support and encourage business in Slovakia.

Below we summarise the key changes that affect all business entities, not only with respect to mergers, but also in other areas of day-to-day commercial activity in Slovakia.

As of 1 January 2018, those who are obliged to file a petition for declaration of bankruptcy of a company will face stricter liability in Slovakia. This could result in them being required to pay a fine/damages and can even result in their disqualification from sitting on boards of Slovak companies.