Fourteen changes to insolvency law have been proposed by the Czech Ministry of Justice to help alleviate the consequences of the financial crisis and, if approved, will come into effect shortly:
- lift the requirement for business debtors to pay social security payments and state employment policy contributions for its employees during a moratorium
- do not include within the debtor's base of assessment any interest payable on credit financing provided within a moratorium
- give the debtor's employees an allowance from the State during the preliminary moratorium and moratorium to cushion them against the effects of their employer's difficulties
- limit creditors to setting off unilaterally their own receivables from the debtor against the debtor's receivables from them both during the moratorium and during the period from publication of the petition for reorganisation of the debtor's business until the reorganisation plan is approved or a decision on bankruptcy made
- do not require debtors to file a petition for their own indebtedness
- allow the insolvency court to modify the amount of a debtor's debt-discharge instalments on certain conditions and when proposed by the debtor
- stop debt discharge automatically leading to monetisation of the debtor's assets when it involves a repayment schedule of the debtor whose assets are used to secure receivables for creditors
- establish a unified information platform to evidence the monetisation (subject to monetisation, dates of public auctions etc.) within the insolvency and execution proceedings
- guarantee a minimum level of remuneration for insolvency administrators in small reorganisations
- cancel the court fees payable on a petition for a moratorium
- decrease administrative costs by limiting the use of an expert to specific situations in insolvency proceedings
- use the same judge and one administrator to deal with insolvency proceedings for all companies creating within a group holding
- allow the debtor and creditors to make a binding nomination of the person to be appointed as insolvency administrator in reorganisation plans which have already been submitted
- restructure the insolvency courts and provide material support to ensure they deliver the highest level of professionalism
Law: Insolvency Act, no. 182/2006 Coll.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 18/03/2009.
