Be aware that:

  • The new rules apply starting October 3, 2018.
  • Many of the new rules also apply to ongoing insolvency proceedings.

Pay attention to the following main amendments:

  • If you act as creditor:
    • You cannot be appointed also as special administrator of the insolvent company.
    • You are no longer entitled to propose the judicial receiver who will conduct the insolvency procedure.
      • Only the insolvency judge will appoint the judicial receiver. Creditors or debtors are no longer entitled to propose the judicial receiver.
      • Creditors may change the judicial receiver appointed by the insolvency judge in the first creditors' meeting.
    • The new rules improve the position and the recovery chances of the tax authorities vis-a-vis you and other creditors.
    • If your receivable exceeds 30 percent of the total, you may be entitled to pursue claims engaging liability of directors of the insolvency company or to appeal the judgments rendered in this regard by the insolvency judge.
    • If you are an insurance company or a creditor acting in the bankruptcy of an insurance company, be aware that several new rules on bankruptcy of insurance companies were enacted starting as of October 3, 2018.
  • Improvements:
    • The monthly reports on actions taken by the judicial receivers must be more detailed and transparent than they were prior to October 3, 2018.
    • Under certain rules, the State authorities are now allowed to swap State's receivables into shares of the insolvent company and become shareholders / majority shareholders of the insolvent company.
    • The State authorities may become less reluctant to approve restructuring plans than before October 3, 2018, also if a haircut of State's unsecured receivables is contemplated as part of the restructuring.
  • Questionable provisions:
    • The failure of the judicial receiver to resolve a payment demand pursued by a creditor with eligible receivables may, in some instances, result in direct commencement of bankruptcy. Thus, the proactive role of the judicial receiver is crucial, as unresolved claims may expose the insolvent company to bankruptcy.

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    The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.