BRATISLAVA, June 8, (WEBNOVINY) — The Cabinet adopted a draft amendment to the law on bankruptcy and restructuring on Wednesday. The Justice Ministry proposes that creditors be allowed to initiate bankruptcy of their debtors earlier than is currently possible.
Under the current law, a creditor wanting to propose the start of debtor’s bankruptcy needs to have the decision of a court on their claim, or a written statement of the debtor recognizing his or her debt. Since 2012, confirmation of an accountant of the fact that the creditor has a claim on their books should be completely sufficient. The draft also proposes greater accountability of members of statutory bodies for not dealing with the company’s insolvency early enough.
According to Justice Minister Lucia Zitnanska, the draft will be a step toward improving the business environment in Slovakia. She says it would help terminating speculative bankruptcies. “We are making the process work. I believe that success of recovering owed money from businesses in bankruptcy will improve,” said Zitnanska at a press conference on Wednesday, explaining that the proposed changes should improve the business environment in Slovakia, giving positive signals to businessmen with good manners. “We would like to bring an end to speculative practices in which an indebted company files for bankruptcy too late, when it officially has no more assets and creditors’s claims cannot be satisfied.”
The draft introduces further changes: it defines debt to equity level at which a company is deemed overly indebted, it enables creditors to submit proposals for bankruptcy and sets limits on settling debts to affiliated creditors. New mechanisms of protecting the interests of creditors of companies that are being restructured are also to be introduced. The measures proposed are intended to put business partners under pressure to honor their obligations, but also to not postpone dealing with insolvency or bankruptcy and to protect businesses from speculation.
SITA