Stricter Liability Rules for Executives Under Slovak Insolvency Law

As of January 1, 2018, those who file a petition for declaration of bankruptcy of a company will face stricter liability in Slovakia, which could even result in their disqualification to sit on boards of Slovak companies, The National Law Review reported. In addition to the obligation to pay a contractual penalty in the amount of €12,500, an executive or board members who fail to file a bankruptcy petition will be liable for damages incurred by the creditors as a result of breach of such filing obligation. If the court rejects the declaration of bankruptcy and suspends the proceedings or cancels opened bankruptcy proceedings, in both cases due to insufficient assets of a debtor, or if enforcement proceedings have been suspended due to the same reason, the executive or board members are still liable. The amount of damages is deemed to equal the amount of receivables that remain outstanding after suspension or cancellation of the bankruptcy or enforcement proceedings due to insufficient assets. Read more.