A number of changes have been made to insolvency procedure to remove various discrepancies and controversial practices:
- courts must now notify the commercial registry of any application to start insolvency proceedings by the next business day at the latest, so that all creditors, partners and contractors can take steps to protect their interests
- courts must suspend insolvency proceedings begun by the company where a creditor has already filed an insolvency application
- court have discretion in limited circumstances to allow the sale of assets to cover the costs and expenses of the insolvency before bankruptcy is declared
- claims secured with a third party are no longer suspended when insolvency proceedings are begun against the debtor
- secured creditors can now challenge the initial date of insolvency where it affects the validity of their security
- an insolvency administrator selling company property which has been used to secure a debt to a third party must keep the proceeds of sale separate and transfer them to the secured creditor on production of a writ of execution
- any amounts deposited in bank accounts by an insolvent company in accordance with Art 71a, Para 1 of the Waste Management Act are excluded from the bankruptcy estate and may not be used to satisfy creditors
Law: amendment of Commerce Act
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The original publication date for this article was 17/02/2011.