Bankruptcy all aspects of insolvency issues

Legislation
What main legislation is applicable to insolvencies and reorganizations?

In principle, the Slovenian Financial Operations, Insolvency Proceedings and Compulsory Winding-up Act (Official Gazette of the Republic of Slovenia, No. 126/07, as amended, hereinafter the Insolvency Act) governs:

insolvency proceedings, which include:
bankruptcy proceedings over a legal entity;
bankruptcy proceeding over a private individual;
bankruptcy proceeding over an inheritance;
compulsory settlement proceedings; and
simplified compulsory settlement proceeding; and
compulsory winding-up proceedings, which include:
proceedings of deletion of the company from the court register without liquidation; and
proceedings of compulsory (judicial) liquidation; and
preventive restructuring proceedings.

The exception to the general rules, provided by the Insolvency Act are insolvency and reorganisation proceedings, initiated over:

credit institutions, which are governed by special, sectoral law, namely the Slovenian Resolution and Compulsory Dissolution of Credit Institutions Act (Official Gazette of the Republic of Slovenia, No. 44/16, as amended, hereinafter Dissolution of Credit Institution Act);
insurance companies, which are governed by special, sectoral law, namely the Slovenian Insurance Act (Official Gazette of the Republic of Slovenia, No. 93/15);
investment fund management companies, which are governed by special, sectoral law, namely the Slovenian Investment Funds and Management Companies Act (Official Gazette of the Republic of Slovenia, No. 31/15, as amended); and
brokerage firms, which are governed by special, sectoral law, namely the Slovenian Financial Instruments Market Act (Official Gazette of the Republic of Slovenia, No. 67/07, as amended).

Excluded entities and excluded assets
What entities are excluded from customary insolvency or reorganisation proceedings and what legislation applies to them? What assets are excluded or exempt from claims of creditors?

According to the Insolvency Act, private individuals, legal entities (including institutes and public institutes, cooperative societies, associations and public funds) and inheritance estates can be subject to a bankruptcy proceeding. With respect to the compulsory settlement, winding-up and preventive restructuring proceedings, those could only be initiated over legal entities.

Because of the lack of legal personality, civil partnerships cannot enter into insolvency proceedings. Only the partners of civil partnerships may be subject to insolvency proceedings.

Private individuals, performing their business activities as private entrepreneurs can be the subject of a compulsory settlement proceeding, but may be the subject of bankruptcy proceedings only in cases where such proceedings are initiated over the private individual, who acts as the private entrepreneur.

As already mentioned, customary rules on insolvency, winding-up and restructuring proceedings do not apply to credit institutions, insurance companies, investment fund management companies and brokerage firms. For such entities, special provisions set out in the special sectoral laws, as listed above (please see question 1), apply.

Generally, only certain assets of private individuals are exempted from the claims of the creditors in the bankruptcy proceeding, namely:

certain personal belongings of the debtor (eg, clothing, objects for personal use, household appliances, which are necessary for fulfilment of basic needs of the debtor’s household, in case of the bankruptcy of a farmer – animal stocks and agricultural machines and appliances, which are necessary for continuous performance of agricultural activities, etc);
certain special categories of personal income (eg, social welfare, child support, scholarships, compensation received for elimination of effects of exceptional occurrences (storms, natural disasters, etc)); and
personal income up to the value equal to 76 per cent of the minimum salary, as prescribed by valid regulations.

In case of legal entities, all its assets are the subject of the bankruptcy estate and are eventually sold or liquidated.

Public enterprises
What procedures are followed in the insolvency of a government-owned enterprise? What remedies do creditors of insolvent public enterprises have?

Slovenian insolvency law does not provide any exemptions to the general provisions on the insolvency proceedings for government-owned enterprises. Hence, generally, the provisions of the Insolvency Act or other special, sectoral law (if the enterprise at hand falls in one of the categories of legal entities, which are subject to special regulation, as listed in question 1) apply also to such enterprises. Creditors of insolvent government-owned enterprises thus have the same rights and remedies as creditors of other insolvent private-owned entities.

The above, however, has one exception. According to the Dissolution of Credit Institution Act, the latter as a special, sectoral law, providing rules on insolvency proceedings of credit institutions, does not apply to the Slovenian Export and Development Bank, as this bank is subject to a special law – the Slovenian Export and Development Bank Act (Official Gazette of the Republic of Slovenia, No. 56/08, as amended). The latter, however, does not provide for the possibility for the mentioned bank to be subject to any insolvency proceedings over the mentioned bank.

The Insolvency Act provides only the possibility to initiate the insolvency proceedings against private individuals and legal entities. Insolvency proceedings therefore cannot be commenced against the Republic of Slovenia or any local municipality.

Protection for large financial institutions
Has your country enacted legislation to deal with the financial difficulties of institutions that are considered ‘too big to fail’?

As a response to the 2008 worldwide financial crisis and consequential costly recapitalisation procedure of all major Slovenian banks, the Dissolution of Credit Institution Act was passed in mid-2016, providing specific rules concerning the special restructuring procedure for banks, and the compulsory winding-up of banks.

The Dissolution of Credit Institution Act only applies to banks and certain other financial institutions. Its main purpose is to provide special rules for restructuring of a bank, facing problems of adequate capitalisation, through early intervention measures and resolution tools such as: the production of recovery and resolution plans, additional supervisory powers for the Bank of Slovenia as national resolution authority to intervene at an early stage, and the entrusting of the Bank of Slovenia with necessary resolution powers and tools such as the sale of business or shares, the setting up of a bridge institution, the separation of assets and the bail-in of shareholders and creditors of a failing institution. If the restructuring measures prove unsuccessful and the bank ends up in the bankruptcy, the Dissolution of Credit Institution Act provides special rules on ranking of the creditors in the course, because of certain special categories of creditors, such as ensured deposit holders, that are to be repaid with priority. Payments of subordinated claims will only be made if the first ranking creditors have been fully satisfied.

Courts and appeals
What courts are involved? What are the rights of appeal from court orders? Does an appellant have an automatic right of appeal or must it obtain permission? Is there a requirement to post security to proceed with an appeal?

Under the Insolvency Act, all insolvency proceedings fall into jurisdiction of district courts. The competent district court is set according to the seat of the insolvent debtor.

The competent court decides on the relevant matters with decisions and orders. The orders are issued solely in relation to provision of instructions to the bankruptcy administrator on certain issues, while all other matters are decided on with decisions. If not provided otherwise, with relation to a specific type of decisions, each decision of the court issued in the insolvency proceeding may be subject to an appeal. Such appeal may be filed by each party in the insolvency proceeding (ie, the debtor, the creditor that initiated the insolvency proceeding and each creditor of the insolvent debtor, who lodged a claim against the insolvent debtor in good time), if not specifically provided otherwise with respect to certain special decisions. With regard to certain decisions of the court, the Insolvency Act may provide the right to appeal also to the insolvency administrator or other, third persons, who are not parties of the insolvency proceeding.

The Insolvency Act does not provide any requirements for posting of a security as a prerequisite for filing of an appeal. Please note, however, that filing of an appeal against the decision of the court in an insolvency proceeding is subject to payment of the court fees in accordance with the general court fees tariff.

Voluntary liquidations
What are the requirements for a debtor commencing a voluntary liquidation case and what are the effects?

Liquidation proceeding

Generally, a voluntary liquidation may be implemented in accordance with the general corporate rules and regulations, provided by the Slovenian Companies Act (Official Gazette of the Republic of Slovenia, No. 42/06, as amended, hereinafter Companies Act), although is certain cases (eg, in case of institutes) also other, specific provisions may apply.

A voluntary liquidation of a company under the Companies Act may be initiated by the company’s shareholders, based on the decision of the general meeting of shareholders on liquidation of the company. Based on the aforementioned resolution, the liquidation is registered in the business register. A liquidation proceeding basically leads to a final dissolvement of the company (the proceeding is lead by one or more liquidators) and deletion thereof from the court and business register, provided that through the disposal of the company’s assets all its creditors are fully repaid.

Bankruptcy proceedings

Under the Insolvency Act, each debtor may file for initiation of the bankruptcy proceeding, whereby no special requirements for such filing are provided. However, that the general requirement for initiation of a bankruptcy proceeding, that is the insolvency of the debtor, should nonetheless be considered, as otherwise such application is later likely to be successfully challenged by the creditors (claiming that the debtor is solvent) and thus, rejected by the court.

Based on the decision of the court on completion of the bankruptcy proceedings, the debtor (if organised as a company) will be deleted from the court and business register.

Voluntary reorganisations
What are the requirements for a debtor commencing a voluntary reorganisation and what are the effects?

Voluntary preventive restructuring proceeding

The Insolvency Act allows filing for initiation of a voluntary preventive restructuring proceeding only with regard to legal entities: (i) that are capital companies; (ii) that are according to the Companies Act classified as small, medium or large companies; and (iii) that can be the subject of a compulsory settlement proceeding.

The voluntary preventive restructuring proceeding may be initiated by the debtor, provided that it is not insolvent yet; however, there is an imminent threat of becoming insolvent within the period of one year. The Insolvency Act provides the assumption that the above requirement is fulfilled, if the debtor acquires consent for the initiation of the aforementioned proceeding from its creditors, holding financial claims (ie, claims, based on (i) a credit facility agreement, agreement on issuance of a bank guarantee or any other agreement of similar content, entered into between the debtor and a bank or other financial institution; (ii) a financial leasing agreement or any other agreement of similar content, entered into between the debtor and a bank or other financial institution; (iii) a loan agreement or any other agreement of similar content, entered into between the debtor and the creditor, which is a non-financial entity; (iv) a suretyship; or (v) a derivative financial instrument) against the debtor, which in total exceed the 30 per cent share of the aggregate value of all financial claims existing towards the debtor.

The application for commencement of the mentioned proceeding has to include: (i) general details on the debtor; (ii) a short description of the circumstances, which provide grounds for the conclusion of the imminent risk of the debtor becoming insolvent; and (iii) a request for initiation of the preventive restructuring proceeding. Such application has to be supplemented with: (i) a list of all financial claims as per the status on last day of the last calendar quartal prior to the filing of the application; (ii) an opinion of the certified auditor, who reviewed and checked the mentioned list of financial claims and issued a confirmation without any reservations; and (iii) statements of creditors, on which the signatures of the legal representatives are notarised, consenting with the initiation of the mentioned proceedings.

After the voluntary preventive restructuring proceeding is initiated (the court issues and adequately publishes decision on the initiation), all ongoing enforcement proceedings are being stalled and no decision on enforcement of claims can be issued against the debtor. Please note that the mentioned effects occur only with respect to the financial claims, listed on the list of financial claims, presented by the debtor together with its application for initiation of the proceeding. Further to the above, with respect to the listed financial claims, the period for their time-barring does not run and the debtor is not late paying the principal amount of those claims.

If the application of the debtor is accepted and the court initiates the preventive restructuring proceedings, the debtor (now under the protection against its creditors) has three (or in case of large company, five) months to present the court for its final approval the agreement on financial restructuring of its obligations towards its financial creditors. The court accepts and approves the agreement, provided:

the agreement has been concluded between the debtor and:
creditors, holders of regular financial claims, listed in the list of financial claims, which present at least 75 per cent of the aggregate value of all regular financial claims, listed on the mentioned list; and
provided that the agreement extends also to secured financial claims, creditors, holders of secured financial claims, listed in the list of financial claims, that present at least 75 per cent of the aggregate value of all secured financial claims, listed on the mentioned list; and
the signatures of representatives of such financial creditors on the agreement on preventive restructuring have to be notarised; and
the agreement has been audited by certified auditor, who issued a confirmation without any reservations.

If the court accepts and approves the agreement on financial restructuring, the agreed restructuring of the financial claims becomes valid in respect to all creditors, holders of regular financial claims against the debtor, who acceded to the agreement and all creditors, holders of secured financial claims against the debtor, who acceded to the agreement.

Further to the above, the validity of the agreement extends also to the regular financial claims or secured financial claims (provided those are subject of restructuring) of those creditors who did not consent with the agreement and thus did not accede thereto; however, only in limited extent, as follows:

with respect to the regular financial claims – reduction of the claims or prolongation of the due date for their payment; and
with respect to the secured claims – prolongation of due time for their payment or reduction of interest rates.

Compulsory settlement proceeding

Under the Insolvency Act, the compulsory settlement proceeding may be initiated over: (i) a legal entity that is organised as a company or cooperative, unless specifically provided otherwise in respect of a company or cooperative concerning the activities it performs; or (ii) private entrepreneur.

The compulsory settlement proceeding may be initiated over the insolvent debtor either by the debtor itself or any of its personally liable shareholders. The application for the commencement of the mentioned proceeding shall include:

a report on the financial situation and operations of the debtor;
an auditor’s report, with the auditor’s opinion without reservation;
a financial restructuring plan;
a report of a certified business evaluator containing his or her unqualified opinion. Such report has to contain the assessment of the evaluator whether: (i) the debtor is insolvent and (ii) estimation, whether the degree of confidence exceeds 50 per cent that the execution of the financial restructuring plan shall enable such financial restructuring of the debtor so as to result in his or her liquidity and solvency and the confirmation of compulsory settlement, proposed by the debtor, would provide the creditors with more favourable payment conditions for their claims than would be the case in bankruptcy proceedings initiated against the debtor; and
evidence of the advance payment of the costs of such proceedings.

Based on the proposal for commencement, the debtor may offer to creditors, holders of unsecured claims:

restructuring of their claims through a reduction of their claims or prolongation of their due times, whereby all creditors shall be treated equally, meaning that the claim of each creditor shall be reduced equally, or the time periods for their repayment shall be prolonged for the same time limits, or there shall be an equal change in interest rate for all such creditors, from the initiation of compulsory settlement proceedings until the expiry of the time limit for the payment of interest; or
in case the debtor is organised as a capital company, restructuring of their claims through reduction and suspension of the maturity of their unsecured claims; or transfer of such claims to the debtor as an in-kind contribution through the procedure of increase of the debtor’s share capital.

The court accepts the application for initiation of the compulsory settlement proceedings and issues a decision on initiation thereof, if the following conditions are fulfilled:

the application has been filed by an entitled entity;
no procedural obstacles exist (ie, compulsory settlement is not permitted if it is applied for before the expiry of:
three years from the day when the debtor has settled all liabilities from a previous compulsory settlement; or
two years after the previous compulsory settlement proceedings have been terminated because of withdrawal of the application; or
two years following the decision of the court, on the basis of which the court has terminated the previous compulsory settlement proceedings because of a successful objection of the creditor; or
the application proposes the restructuring of the debtor’s obligations, which is in line with the scope of the Insolvency Act;
the content of the application for initiation of the compulsory settlement proceedings includes all required documentation; and
the provided documentation is in line with the requirements of the Insolvency Act.

Together with the decision on initiation of the compulsory settlement proceeding, the court also issues a call to the creditors to lodge the claims that they hold against the debtor within the period of one month.

The decision on the final confirmation of the proposal for financial restructuring of the debtor’s obligations through the compulsory settlement proceedings is made by the creditors, holders of timely and duly lodged unsecured claims against the debtor by voting. For voting, the aggregate value of each creditor’s claim is adjusted by multiplying its aggregate value with an adjustment factor, prescribed by the Insolvency Act (which depends on the nature and certain qualities of such claim). The proposal for financial restructuring of the debtor through the compulsory settlement proceeding is accepted, if confirmed by the creditors, whose aggregate value of adjusted claims equals at least three-fifths of the aggregate value of all adjusted claims, which have been timely lodged in the proceeding and confirmed and accepted by the insolvency administrator (see question 35). The accepted compulsory settlement is finally confirmed by a decision of the insolvency court, which shall be issued within three working days of being notified on the voting results by the insolvency administrator.

Generally, an approved and confirmed proposal for restructuring of the debtor’s obligations through the compulsory settlement proceeding affects all unsecured claims of the creditors towards the debtor that occurred up to the initiation of compulsory settlement proceedings.

Please note that, except for in certain special cases, the compulsory settlement proceeding does not affect:

secured claims;
priority claims;
rights of exclusion; and
obligations of:
sureties; and
persons liable to recourse, related to any affected unsecured claim.

Successful reorganisations
How are creditors classified for purposes of a reorganisation plan and how is the plan approved? Can a reorganisation plan release non-debtor parties from liability, and, if so, in what circumstances?

Voluntary preventive restructuring proceeding

Only the creditors and holders of financial claims can be parties in the voluntary preventive restructuring proceeding. For the purpose of the aforementioned proceeding, the creditors are classified into two groups – regular creditors, whose financial claims are not secured; and secured creditors, whose financial claims are secured by collaterals.

Compulsory settlement proceeding

For the purposes of the compulsory settlement proceedings, creditors are classified into the following groups:

unsecured creditors;
secured creditors (holding rights of separate settlement); and
priority creditors (holder of priority claims – see also question 38).

The Insolvency Act does not provide for the possibility that the agreement on financial restructuring would release or in any way amend the non-debtor parties from their liability.

Involuntary liquidations
What are the requirements for creditors placing a debtor into involuntary liquidation and what are the effects? Once the proceeding is opened, are there material differences to proceedings opened voluntarily?

Under Slovenian law, there are two possibilities for placing a debtor into involuntary liquidation, namely bankruptcy proceedings and compulsory liquidation proceedings.

With respect to the conditions under which a debtor may be placed into a bankruptcy proceeding, please see question 15.

With respect to the compulsory liquidation preceding, however, the Insolvency Act provides that such proceeding may only be initiated: (i) ex officio, if so required by the law, or (ii) on the basis of a request, filed by a person who is legally entitled to file such request. Based on this, the creditors are not entitled to initiative such proceedings.

Involuntary reorganisation
What are the requirements for creditors commencing an involuntary reorganisation and what are the effects? Once the proceeding is opened, are there any material differences to proceedings opened voluntarily?

Aside from the general provisions of the Insolvency Act in respect to compulsory settlement (see question 7) the Insolvency Act also provides the possibility for the creditors of a capital company that, according to the Companies Act has a status of a small, medium or large company, to initiate the compulsory settlement proceeding over such company.

The application for initiation may only be filed by financial creditors of the debtor (for a definition of financial creditor, see question 7) holding more than 20 per cent of the aggregate value of all financial obligations of the debtor, as reported in the last yearly business report.

The application for the commencement of the mentioned proceeding shall (aside from general information on the debtor) include:

(i) statements of the creditors who filed the application, that they consent with the initiation of the compulsory settlement proceeding (signatures of the creditors or their statutory representatives on such statements shall be notarised);

(ii) with respect to each creditor from point (i), a report of an auditor in which the latter established (without any reservations):

the aggregate amount of financial obligation of the debtor (as reported in the debtor’s last business report);
the aggregate value of financial claims of the creditor as per the cut-off date, which shall be the same as the cut-off date of the last business report of the debtor; or
the proportion, which the value of financial claims of the individual creditor (from point (ii) above) represents in the aggregate value of financial obligations of the debtor (as established under point (i) above).

If the application is approved by the court and the compulsory settlement proceeding is initiated, the creditors are obliged to present the final proposal for restructuring of the debtor’s claims, which shall be included in the financial restructuring plan of debtor’s obligations, within three months following the date of initiation of the proceedings. A proposal for compulsory settlement may in the same period be filed also by the debtor itself, whereby in case the court receives two proposals, the proposal of the creditors has priority and is to be voted on. With respect to the procedure of acceptance and confirmation of the proposal for restructuring of debtor’s financial obligations through the compulsory settlement proceeding, see question 7.

Expedited reorganisations
Do procedures exist for expedited reorganisations (eg, ‘prepackaged’ reorganisations)?

Under the Insolvency Act, an expedited compulsory settlement proceeding may be initiated over a debtor, who has a status of a micro company under the Companies Act or is a private entrepreneur, whereby such proceeding may only be initiated by the debtor itself.

The Insolvency Act provides the following main simplifications in the expedited compulsory settlement proceeding compared to the regular compulsory settlement proceeding:

(i) the debtor’s application for initiation of the proceeding does not need to include any auditor’s opinions; the debtor shall only provide a statement that the report on its financial status is true and correct and reflects their true financial situation and business operations (the statement has to be made in the form of a notarial deed);

(ii) within one month following the filing of the application, the debtor is obliged to provide an updated list of all unsecured claims that the creditor holds, and that shall be affected by the compulsory settlement proceeding, together with the statement of the debtor that the provided list is final and true (the statement has to be made in the form of a notarial deed);

(iii) there is no lodging of creditors’ claims procedure;

(iv) all creditors whose claims were included in the updated list of all unsecured claims have the right to vote on the proposal for restructuring of obligations through the compulsory settlement proceeding; and

(v) the above-mentioned proposal is accepted if confirmed by:

creditors, whose aggregate value of claims (included on the updated list of unsecured claims from point (ii) above) represents at least three-fifths of the aggregate value of all unsecured claims, included in the mentioned list; and
more than half of all creditors whose unsecured claims against the debtor have been included in the above-mentioned list.

Unsuccessful reorganisations
How is a proposed reorganisation defeated and what is the effect of a reorganisation plan not being approved? What if the debtor fails to perform a plan?

Voluntary preventive restructuring proceeding

The Insolvency Act provides the following reasons for termination of the preventive restructuring proceedings, if:

the insolvency court issuing the decision of rejecting of the proposal for preventive restructuring on procedural grounds (because of, for example, lapse of deadlines, provided for filing of the agreement on financial restructuring; filing incomplete proposal for approval of the agreement on financial restructuring, whereby the filing is not completed within the set deadline, etc);
termination is requested by creditors, whose aggregate value of financial claims towards the debtor, listed on the list of financial claims, exceed the 30 per cent of the aggregate value of all listed financial claims;
termination is requested by the debtor; or
the debtor is in delay with payment of the salaries (only up to the minimum salary) to its employees or payment of social contributions for more than 15 days.

Following the rejection of the debtor’s application for approval of the agreement on financial restructuring, the court issues a decision containing the warning to all creditors that the consequences of the previously initiated voluntary preventive restructuring proceedings (see also question 7) will expire within a month of the issuance of the respective decision, if none of the creditors will file for initiation of the compulsory settlement proceedings over the debtor. After the expiry of this one-month period, if neither the debtor, nor any of the creditors, files for initiation of the compulsory settlement proceedings over the debtor, the court issues a decision on termination of the preventive restructuring proceedings.

The Insolvency Act provides no special consequences for the case if the debtor fails to perform its obligations under the agreement on financial restructuring. In such case, the creditors may start with the enforcement of their restructured claims or, should the required conditions be fulfilled, file for initiation of an insolvency proceeding over the debtor.

Compulsory settlement proceedings

Under the Insolvency Act, each creditor or the insolvency administrator may object the debtor’s application for initiation of the compulsory settlement proceeding, by claiming (and proving) the non-existence of conditions for the initiation of the compulsory settlement proceedings:

(i) if the debtor is not insolvent and can meet all obligations in full and in time;

(ii) if the insolvent debtor can meet its obligations to a greater extent and within shorter time limits than offered by the compulsory settlement petition;

(iii) if the degree of confidence that the execution of the financial restructuring plan would enable the financial restructuring of the debtor, which would provide for its liquidity and solvency, is lower than 50 per cent;

(iv) if the degree of confidence that the confirmed compulsory settlement, proposed by the debtor, would ensure the creditors more favourable payment conditions for their claims than would be the case in initiation of bankruptcy proceedings against the debtor is lower than 50 per cent; or

(v) if the insolvent debtor acts contrary to limitations and requirements, provided by the Insolvency Act in respect to management of the debtor after the initiation of the compulsory settlement proceeding.

The objection shall be filed within three months of the issuance of the announcement of the initiation of the compulsory settlement proceeding.

If the reason for objection under point (i) above is proven, the court rejects the debtor’s proposal for financial restructuring through the compulsory settlement proceedings. In such case the creditors may enforce the payment of their claims through the regular enforcement proceedings. If, however, any of the reasons for objection from points (ii) through (v) above is proven, the court terminates the compulsory settlement proceedings and initiates ex officio the bankruptcy proceeding over the debtor.

Further to the above, any creditor whose claim is affected by the confirmed compulsory settlement may request annulment of the confirmed compulsory settlement, if the insolvent debtor may pay the claims of the creditors who are affected by the confirmed compulsory settlement, in the total amount of their unsecured claims. A lawsuit requesting the annulment shall be filed within six months of the due date for payment of claims as determined in the confirmed compulsory settlement. Furthermore, any creditor whose claim is affected by the confirmed compulsory settlement may request the annulment of the confirmed compulsory settlement, if this has been obtained by fraud. A lawsuit requesting the annulment on such grounds shall be brought forward within two years following the finality of the resolution on confirmation of the compulsory settlement.

If the debtor fails to perform under the approved plan of restructuring of its financial obligations, any creditor may enforce the payment of the claim through the enforcement proceeding (approved compulsory settlement has a quality of an enforcement title), or file for initiation of the bankruptcy proceeding over such debtor, provided that the general conditions for initiation of the bankruptcy proceeding (see question 15) are fulfilled.

Corporate procedures
Are there corporate procedures for the dissolution of a corporation? How do such processes contrast with bankruptcy proceedings?

The Companies Act provides the standard procedures for dissolving of a company (called ‘liquidation’; see also question 6).

The liquidation proceedings are quite different from insolvency proceedings as they presume liquidity and solvency of the company, whereby all creditors of the company have to be repaid in full and thus do not require any involvement of the court, apart from deletion of the company from the business register. Furthermore, no administrator (in the meaning as provided by the Insolvency Act, being the adequately licensed expert) is present as the liquidator who leads the liquidation proceeding is usually one of the previous members of the company’s management. There also exist no strict deadlines in liquidation in respect to performance of certain acts. Finally, the liquidation proceeding may at any time be terminated by the general meeting of the company with the company returning to the ordinary performance of its business activities, compared to the bankruptcy proceeding, which is final and always leads to the dissolution of the company and its deletion from the companies register.

Conclusion of case
How are liquidation and reorganisation cases formally concluded?

Liquidation proceeding

Under the Companies Act, a liquidation proceeding is formally concluded when, based on the resolution of the general meeting of the shareholders, accepting the proposed distribution of the company’s assets and statement of the liquidator that all assets have been distributed in accordance therewith, the court deletes the company form the business register.

Voluntary preventive restructuring proceeding

According to the Insolvency Act, the preventive restructuring proceeding concludes with the decision of the court, approving the concluded agreement on financial restructuring of the debtor.

Compulsory settlement proceeding

Based on the report of the insolvency administrator that the proposal for restructuring of the debtor’s obligations against unsecured creditors was approved and accepted by the required majority of the creditors, the insolvency court issues a decision on confirmation of the compulsory settlement. After such a decision of the insolvency court becomes final, it represents the enforcement title with respect to all unsecured claims affected by the respective compulsory settlement. All other court decisions, settlements and decisions of other competent authorities, issued with respect to any affected unsecured claim, prior to the decision on the confirmation of the compulsory settlement, lose the quality of being an enforcement title with respect to such part of the relevant unsecured claim, which has been restructured (ie, reduced principle, prolonged maturity date, reduced interest rate) through the compulsory settlement proceeding.

Bankruptcy proceedings

After the entire assets of the debtor are realised and the final distribution to the creditors is performed, the court issues, on the basis of a final report of the bankruptcy administrator, a decision on conclusion of the bankruptcy proceedings. After such decision becomes final, the debtor is deleted from the court and business register.

Conditions for insolvency
What is the test to determine if a debtor is insolvent?

Under the Insolvency Act, a debtor becomes insolvent if he or she fulfils one of the following criteria for determination of the insolvency: long-term illiquidity or long-term inability to duly pay its obligations.

Under the Insolvency Act, it is assumed (if not proven otherwise) that the debtor is illiquid if:

with respect to the debtor, who is a legal entity, private entrepreneur or private individual, who performs his or her business activities as his or her profession (eg, lawyer, doctor, notary, farmer, etc):
if the debtor is in delay with payment of one or several obligations towards its creditors, the value of which exceed 20 per cent of the aggregate value of its obligations, as per status of the last published annual business report; or
if the financial means, available on the debtor’s bank accounts do not suffice for repayment of the debtor’s obligations under the final court decision on enforcement of obligations or enforcement draft and such status lasts uninterruptedly for last 60 days, or with interruptions for more than 60 days within last 90 days; or
does not hold a bank account in Slovenia;
with respect to the debtor, who was the subject of compulsory settlement proceedings or simplified compulsory settlement proceedings, which were concluded with a final approval of such compulsory settlement, if the debtor runs late for more than two months with:
payment of any of its obligations under the approved compulsory settlement;
payment of any of its obligations towards the secured creditors, which occurred prior to commencement of such compulsory settlement proceedings; or
fulfilment of any other acts of financial restructuring provided in the financial restructuring plan (prepared as part of the preparatory documentation for initiation of the compulsory settlement proceedings);
with the debtor, who is a private individual (a consumer), if:
he or she is two or more months late fulfilling one or several obligations, in the aggregate value exceeding three times the value of its regular monthly salary, compensation or any other personal income that such person is receiving regularly, in the period not exceeding two months; or
he or she runs late fulfilling obligations with aggregate value exceeding €1,000, provided that he or she is unemployed and does not receive any other regular personal income.

It is further assumed (if not proven otherwise), that the debtor has a long-term inability to duly pay its obligations, if:

the value of the debtor’s assets is lower than the sum of all debtor’s obligations (indebtedness); or
with respect to the debtor, who is a capital company, if the loss, generated in the current calendar year, combined with the losses brought forward from previous business years, exceeds half of the total value of the company’s share capital and such loss cannot be covered with profits brought forward from previous business years or capital reserves of the company.

Finally, the Insolvency Act assumes, without any possibility to prove otherwise, that the legal entity, private entrepreneur or private individual who preforms business activities as his or her profession became long-term illiquid, if such debtor runs late for more than two months with:

payment of salaries (up to the amount of the minimum salary) to its employees; or
payment of taxes and social welfare contributions, which the employer is obliged to pay together with payment of the salaries to its employees and such delay exists also on the last day prior to filing for bankruptcy.

Mandatory filing
Must companies commence insolvency proceedings in particular circumstances?

If the company becomes insolvent, all payments and taking of new financial obligations that are crucial for normal performance of its business operations shall cease immediately (except in relation to such payments and taking of new financial obligations). The management is obliged to prepare within one month a report on actions of financial restructuring (that shall eliminate insolvency) of the company and present such report to the supervisory board. Such report shall (among other things) also include the opinion of the management on whether the chances of performing a successful financial restructuring of the company would enable the company to become solvent again.

If the opinion of the management of the company is that the chances for successful restructuring are lower than 50 per cent, or the opinion of the management on the chances for successful restructuring are higher than 50 per cent, but afterwards the company fails to raise the required new capital by recapitalisation of its existing shareholders, the management is obliged to prepare and file (in a rather short deadline of three days) a complete proposal for initiation of the bankruptcy proceedings.

Directors’ liability – failure to commence proceedings and trading while insolvent
If proceedings are not commenced, what liability can result for directors and officers? What are the consequences for directors and officers if a company carries on business while insolvent?

The management of the insolvent company may be held personally liable by the creditors for the damages incurred because of lower repayment of their claims in the bankruptcy proceedings as a result of the management’s failure to perform in a timely fashion the required actions for the case of insolvency or failure to act in accordance with the prohibition of performing the payments or taking of new financial obligations (see question 16).

The Insolvency Act assumes (if not proven otherwise) that the damages incurred to the creditors because of failure or omission of required acts and actions of the management of the insolvent company equal the difference between the value of the creditor’s claim and the value of repayment of such claim, achieved by such creditor in the bankruptcy proceedings. Such damages shall be repaid by all managers jointly and severally.

Please note that the manager’s liability under the Insolvency Act is limited up to twice the aggregate value of all incomes of such individual manager, related to his or her position in the insolvent company in the business year of the act or omission that caused the occurrence of damages.

Directors’ liabilities – other sources of liability
Apart from failure to file for proceedings, are corporate officers and directors personally liable for their corporation’s obligations? Are they liable for corporate pre-insolvency or pre-reorganisation actions? Can they be subject to sanctions for other reasons?

Civil liability

Apart from the liability of the members of the company’s management provided for in the Insolvency Act, the Companies Act provides further liabilities of a company’s management members. Generally, managing directors of a limited liability company and members of the management board of a joint stock corporation are required to act and exercise their powers in the affairs of the company with the diligence of a prudent businessperson. If they fail to do so, they are jointly and severally liable to the company for any incurred damage. The obligation to perform its acts as members of the company’s management with the expected diligence includes also the duty to act adequately, should the company be faced with a financial, solvency or liquidity crisis.

Criminal liability

Further to the above-mentioned civil law liability, Slovenian Criminal Code (Official Gazette of the Republic of Slovenia, No. 55/08, as amended: Criminal Code) provides also the possibility to hold the corporate officers and directors liable for commitment of the following criminal acts:

criminal act of fraudulent bankruptcy – this arises if a person (ie, the debtor or any third person) with the intention to avoid fulfilment of a debtor’s obligations or liabilities, causes the debtor’s financial position to deteriorate and thereby causes bankruptcy or deletion of the company from the register without liquidation. The perpetrator may be punished by imprisonment of six months to five years, and in case of grater damages incurred to the creditors, by imprisonment of one to eight years; or
criminal acts of intentional defrauding of creditors – this arises when the debtor, knowing of its own or another party’s inability to repay all of its creditors, gives a preferential treatment to one of the creditors, while the other creditors suffer serious damage as a consequence of such preferential treatment. The perpetrator may be punished by imprisonment of a maximum term up to five years.

Shift in directors’ duties
Do the duties that directors owe to the corporation shift to the creditors when an insolvency or reorganisation proceeding is likely? When?

The Insolvency Act does not provide for a shift of director’s duties to creditors when an insolvency or reorganisation proceeding is likely.

Directors’ powers after proceedings commence
What powers can directors and officers exercise after liquidation or reorganisation proceedings are commenced by, or against, their corporation?

According to the Companies Act, a company may have one or more liquidators appointed, whereby the liquidator or liquidator(s) may be (and usually are) one or several of the former members of the company’s management. Please note, however, that the general assembly of the shareholders may also decide to appoint a third person to be the liquidator. In such case, the management is recalled and their duties cease.

Under the Insolvency Act, the powers that remain in the hands of the directors after the insolvency proceedings are initiated depend on the type of the proceeding, namely:

in the voluntary preventive restructuring proceeding, the company subject thereto continues to be run by its existing management with their full powers;
in the compulsory settlement proceedings, the management of the company subject thereto remains in position, however, their powers are limited by:
monitoring performed by the insolvency administrator, who shall have access to all information and data related to performance of the debtor’s business activities and may, if he or she deems it necessary, propose to a court to prohibit certain anticipated acts or actions by the debtor’s management, should such acts present a violation of the rules on compulsory settlement; and
the obligation to acquire a prior consent of the insolvency court with respect to certain acts and actions, namely:
disposal of assets (except in the scope, necessary for performance of regular business activities);
entering into loan or any other credit facility agreements;
issuing of suretyships; and
performance of any acts or actions that would result in unequal treatment of creditors or hindering of performance of the proposed financial restructuring; and
in the bankruptcy proceedings, the management of the debtor is deemed recalled and all powers and authorisations of the management cease immediately after the proceeding is initiated.

Stays of proceedings and moratoria
What prohibitions against the continuation of legal proceedings or the enforcement of claims by creditors apply in liquidations and reorganisations? In what circumstances may creditors obtain relief from such prohibitions?

Ongoing litigation proceedings

The Slovenian Civil Procedure Act (Official Gazette of the Republic of Slovenia, No. 26/1999, as amended, Civil Procedure Act) provides the initiation of a bankruptcy proceeding (by a final decision of the court) as a grounded reason for staying of the ongoing litigation proceeding. As long as the litigation procedure is stayed, no party can perform any actions in the procedure and the court does not issue any decisions. Further to that, because of the stay of proceedings no procedural deadlines are running, and all deadlines start to run anew, when the proceedings are reopened.

The stayed litigation proceeding is reopened (on the basis of a decision of a court) on the basis of a statement, issued by the bankruptcy administrator on taking over and continuing of the proceedings or, when the court, based on request of other parties in the procedure, invites the administrator to do so (and sets a deadline therefor).

Enforcement proceedings

Under the Insolvency Act, except in some exceptional cases, no new enforcement proceeding can be initiated against an insolvent debtor.

With respect to the ongoing enforcement proceedings, the Insolvency Act provides as follows:

in compulsory settlement proceedings: all ongoing enforcement proceedings are being stayed and are re-opened only on the basis of the decision of the court, which runs the compulsory settlement proceedings for which the Insolvency Act specifically provides to be the grounds for re-opening of enforcement proceedings (eg, a final decision on confirmation of the compulsory settlement);
in bankruptcy proceedings:
ongoing enforcement proceedings in which, until the initiation of the bankruptcy proceedings, the creditor has not acquired a right of a separate settlement, are terminated with initiation of the bankruptcy proceedings;
ongoing enforcement proceedings in which, until the initiation of the bankruptcy proceedings, the creditor has acquired a right of a separate settlement, but a sale of the property of the debtor on which such right has been established has not been performed prior to the initiation of the bankruptcy proceedings, are stayed; and
the initiation of the bankruptcy proceedings do not influence the ongoing enforcement proceedings in which, until the initiation of the bankruptcy proceedings, the creditor has acquired a right of a separate settlement, and the sale of the property of the debtor on which such right has been established has already been performed prior to the initiation of the bankruptcy proceedings. Such enforcement proceedings are completed in accordance with relevant rules and regulations of the enforcement law (eg, rules on distribution of purchase price, rules on transfer of ownership, etc).

Voluntary preventive restructuring proceedings

Under the Insolvency Act, no enforcement proceedings may be initiated against the debtor with respect to any financial claim, being included in the list of financial claims of the debtor (see question 7) after the initiation of the voluntary preventive restructuring proceedings. All such proceedings that are already ongoing are stayed.

Under the Insolvency Act, the creditors cannot apply to the court to lift the above-mentioned moratorium on initiation of enforcement actions.

Doing business
When can the debtor carry on business during a liquidation or reorganisation? Is any special treatment given to creditors who supply goods or services after the filing? What are the roles of the creditors and the court in supervising the debtor’s business activities?

Continuation of business activities in liquidation proceedings

Under the Companies Act, the company in liquidation is allowed only to complete the unfinished businesses activities. Entering into new business activities (eg, accepting new orders, entering into new delivery contracts, etc) is permitted solely on the basis of an explicit consent of the general meeting of the shareholders.

Continuation of business activities in voluntary preventive restructuring proceedings

The debtor is permitted to continue only with its regular business activities.

Continuation of business activities in compulsory settlement proceedings and bankruptcy proceedings

As a general rule, under the Insolvency Act, an insolvent debtor is permitted to perform only those payments and to undertake those new obligations that are vital for performance of regular business activities. Furthermore, in bankruptcy proceedings the business activities that were also started prior to its initiation may be completed solely on the basis of a special permission, issued by the bankruptcy court. Such permission is, however, issued on the basis of (among other things) the consent of the creditors’ committee.

Concerning the position of suppliers of the debtor in bankruptcy proceedings who continues with performance of his or her business activities, such suppliers of goods or services are paid as costs of the bankruptcy proceedings and are repaid prior to first distribution of the bankruptcy estate.

Post-filing credit
May a debtor in a liquidation or reorganisation obtain secured or unsecured loans or credit? What priority is or can be given to such loans or credit?

The bankruptcy administrator may enter into loan and other credit facility agreements; however, only to secure the required financial means for continuation of the debtor’s business activities, and on the basis of a special consent of the insolvency court (the latter has to issue a new consent with respect to entering into each new loan or other credit facility agreement). Repayment of such loans is considered to be a cost of bankruptcy proceedings and is thus made prior to the first distribution of the bankruptcy estate.

The debtor in a compulsory settlement proceeding may obtain a loan or other credit facility only on the basis of the express consent of the court, and to the aggregate value of financial means needed by the debtor in respect of continuation of its regular business activities or covering of costs of compulsory settlement proceedings. As such loans are entered into by the debtor after the initiation of the compulsory settlement proceeding, the latter does not have any influence thereon and the loans have to be repaid in full.

Sale of assets
In reorganisations and liquidations, what provisions apply to the sale of specific assets out of the ordinary course of business and to the sale of the entire business of the debtor? Does the purchaser acquire the assets ‘free and clear’ of claims or do some liabilities pass with the assets?

Liquidation proceeding

The Companies Act does not provide any special rules on sale of assets of the legal entity in liquidation. The sale of such assets is thus subject to ordinary rules on sale of property.

Bankruptcy proceedings

Each sale of assets of the debtor in bankruptcy proceedings by the bankruptcy administrator is permitted solely on the basis of a prior final decision of the insolvency court. Generally, sale of assets may only be performed on the basis of a public auction or a call for binding bids. Only if such procedures are not successful, the sale of assets may be performed on the basis of direct negotiations with the buyer who made the offer in the procedure of a call for non-binding bids, which was carried out prior to the beginning of direct negotiations.

The assets are always sold ‘free and clear’ of the following encumbrances, established in favour of third persons: (i) lien or mortgage; (ii) prohibition of sale or encumbrance; or (iii) personal servitudes, real charge or right to build.

In case the assets are sold as a whole business, the purchaser becomes the owner not only of all movable assets and real property pertaining to such whole business, but as a universal legal successor also of all other rights associated with such whole business (eg, trademarks, concessions, etc).

Negotiating sale of assets
Does your system allow for ‘stalking horse’ bids in sale procedures and does your system permit credit bidding in sales?

The Insolvency Act does not provide for the possibility of ‘stalking horse’ bids. This is true also for credit bidding, although the Slovenian insolvency courts allow in their practice that in case the creditors are purchasers of certain items from the bankruptcy estate, the purchase price for such items may be set off with their claim against the debtor, which in our opinion has the same effect.

Further to the above-mentioned, the Insolvency Act also provides the possibility that the assets that cannot be realised by the bankruptcy administrator through the course of the bankruptcy proceedings are offered to the creditors for their takeover. If a creditor agrees with such takeover, his or her claim is reduced by the appraised value of the unrealised assets.

Rejection and disclaimer of contracts
Can a debtor undergoing a liquidation or reorganisation reject or disclaim an unfavourable contract? Are there contracts that may not be rejected? What procedure is followed to reject a contract and what is the effect of rejection on the other party? What happens if a debtor breaches the contract after the insolvency case is opened?

Liquidation proceeding

Under the Companies Act, the legal entity in liquidation is obliged to complete all of its obligations under the existing agreements. Any withdrawal from an agreement that has not been entirely fulfilled by this entity may only be performed in consent with the opposite parties of the agreement (consensual termination of the agreement).

Compulsory settlement and bankruptcy proceedings

The debtor in the compulsory proceedings may unilaterally withdraw only from a mutually unfulfilled bilateral (or multilateral) agreement (ie, any agreement that has not been entirely fulfilled by both or all parties to such agreement). Such withdrawal may, however, be performed solely on the basis of a special consent of the insolvency court. As a result, the mutual obligations under such agreement that have already been fulfilled by the parties are deemed to be set off. If the obligations of the debtor under such agreement are not set off entirely (meaning that the debtor has received a greater fulfilment than the one given to the opposite party), than the opposite party retains the claim for payment of such difference, whereby such claim is exempted from the conditions of the final compulsory settlement (ie, the claim will have to be fully repaid).

The above applies also in cases where a mutually unfulfilled agreement is withdrawn from by a debtor in a bankruptcy proceeding. The claim that the opposite party acquires on the basis of uncomplete set-off of fulfilments, performed by the parties under such agreement, however, is repaid as a claim of a regular (unsecured) creditor from the bankruptcy estate.

The initiation of a bankruptcy proceedings does not influence the obligation of the opposite party to complete all its obligations under the existing agreement. If this is not performed, the debtor (through bankruptcy administrator) may claim such fulfilment or all damages incurred to the debtor as a result of uncomplete fulfilment.

Intellectual property assets
May an IP licensor or owner terminate the debtor’s right to use the IP when a liquidation or reorganisation is opened? To what extent may IP rights granted under an agreement with the debtor continue to be used?

There are no special provisions on IP licensing agreements in the Insolvency Act. Generally, the licensors have to fulfil all their obligations towards the insolvent debtor, unless the agreement is withdrawn from by the debtor itself on the basis of special rules on withdrawal from mutually unfulfilled agreement (see question 26).

Personal data
Where personal information or customer data collected by a company in liquidation or reorganisation is valuable, are there any restrictions in your country on the use of that information or its transfer to a purchaser?

Transfer of personal data to a purchaser is subject to the provisions set out in the Slovenia Personal Data Protection Act (Official Gazette of the Republic of Slovenia, No. 86/04, as amended) and as of 25 May 2018 the GDPR (in scope, although this has not yet been implemented into other Slovenian laws).

According to the GDPR, the transfer of a customer’s personal data collection (as a part of an asset deal) is only possible if the debtor informs the respective data subjects about the envisaged data transfer. For transferring of sensitive data, explicit consent of each individual data subject affected by such transfer has to be obtained prior to such transfer. The transfer of such personal data collection is much easier if the transfer occurs as part of the sale of a whole business, where the purchaser is deemed the universal legal successor and thus no further restrictions to such transfer apply.

Arbitration processes
How frequently is arbitration used in liquidation or reorganisation proceedings? Are there certain types of disputes that may not be arbitrated? Can disputes that arise after the liquidation or reorganisation case is opened be arbitrated with the consent of the parties?

Under the Insolvency Act, Slovenian courts are exclusively competent for resolving all issues directly related to an insolvency proceeding.

Arbitration agreements entered into by the debtor prior to the initiation of an insolvency proceeding do not cease automatically but may be: withdrawn from by the administrator based on rules on withdrawal from mutually unfulfilled agreements (see question 26); or challenged by the insolvency administrator based on rules on challenge of agreements, entered into prior to initiation of the insolvency proceeding (see question 51).

Arbitration as a form of dispute resolution can, however, be used in cases where the insolvency administrator has entered into an agreement (see question 22) as the representative of the debtor and is thus bound by the contractual provisions and any arbitration agreement contained therein.

Creditors’ enforcement
Are there processes by which some or all of the assets of a business may be seized outside of court proceedings? How are these processes carried out?

As already mentioned above (see question 21) the decision on initiation of the insolvency proceedings imposes an automatic stay with regard to litigation or enforcement proceedings initiated against the debtor. Unsecured creditors can no longer enforce any of their rights in legal proceedings outside the insolvency proceedings.

The above, however, does not also apply to secured creditors. If such creditor namely holds the right to carry out an out-of-court sale of assets that are the subject of the security and thus of the right to separate settlement, this creditor also retains the right after the initiation of bankruptcy proceedings and may continue to enforce their claims by seizing and selling of the debtor’s property.

Unsecured credit
What remedies are available to unsecured creditors? Are the processes difficult or time-consuming? Are pre-judgment attachments available?

As long as there is no insolvency proceeding initiated against the debtor, unsecured creditors may enforce their claims in accordance with the provisions of the Slovenian Claim Enforcement and Security Act (Official Gazette of the Republic of Slovenia, No. 51/98, as amended, hereinafter the Enforcement Act), provided that they already dispose with an enforceable instrument (final court judgment, enforceable notarial deed, etc).

In such enforcement proceedings, the creditor will normally try to enforce its claim against the real property, receivables, rights and any other assets of the debtor and may, among others, apply for establishment of a mortgage over the debtor’s real property or lien on the debtor’s movables. If such mortgage or lien is established, the creditor becomes a secured creditor and may, in case bankruptcy proceedings are initiated over the debtor, request repayment of its claim from proceeds gathered by the sale of such encumbered property.

Please note, however, that enforcement procedures under the Enforcement Act are usually very time consuming.

Further to the above, the Slovenian law also enables pre-judgment attachments, which, however, do not form a legal ground for establishment of the rights for priority repayment in the bankruptcy proceeding (ie, right to separate settlement).

Creditor participation
During the liquidation or reorganisation, what notices are given to creditors? What meetings are held and how are they called? What information regarding the administration of the estate, its assets and the claims against it is available to creditors or creditors’ committees? What are the liquidator’s reporting obligations?

Under the Insolvency Act, all decisions of the insolvency court are published on the insolvency publications portal (eObjave), which is run by the Slovenian Agency of the Republic of Slovenia for Public Legal Records and Related Services. Thus, the creditors should pay attention to all public notifications, published on the mentioned portal and should track the publications thereon in respect to certain entities, should they suspect such entities may become insolvent.

Further to the above, the bankruptcy administrator is obliged to publish regular reports on the developments in the bankruptcy proceedings (once every quarter). If there have been any exceptional developments in the proceedings, the administrator informs the creditors thereabout with a special report, which again is published on the above-mentioned portal.

In cases of compulsory settlement proceedings and, if so requested by the creditors, also in the bankruptcy proceeding, a special creditors’ committee may also be appointed (see question 33). The committee has regular sessions (at least once every quarter) and discusses all opened issues related to the bankruptcy proceeding and motions and proposals related to certain acts and actions of the administrator, filed either by the administrator or any other creditor. The creditors’ committee has the right to inspect the business records of the insolvent debtor and the entire documentation related to the bankruptcy proceeding.

Creditor representation
What committees can be formed (or representative counsel appointed) and what powers or responsibilities do they have? How are they selected and appointed? May they retain advisers and how are their expenses funded?

Under the Insolvency Act, in each compulsory settlement proceedings and, if so requested by the majority of creditors, also in case of a bankruptcy proceeding, a creditors’ committee is appointed that represents the interests of the largest creditors of the insolvent debtor. The creditors’ committee is composed of between three and 11 members (depending on the aggregate number of all creditors of the insolvent debtor). In case of the compulsory settlement proceeding, the members of the creditors’ committee are representatives of the largest creditors (depending on the value of their regular claims, lodged into the insolvency proceeding), who are appointed by the insolvency court. In the bankruptcy proceeding, however, the members are being voted on, whereby each creditor may delegate a member, who needs the support of a majority of all creditors to be elected as a member of the committee.

The committee:

gives (non-obligatory) opinion on or (obligatory) consent to certain decisions in the insolvency proceeding;
discusses and reviews the reports of the insolvency administrator; and
preforms other assignments, if so provided in the Insolvency Act.

The Insolvency Act does not specifically regulate retaining of the advisers to the members of the creditors’ committee, but at the same time does not expressly prohibit such retaining by an individual member, if such member deems that necessary. However, such experts are retained at the member’s own cost and the member cannot claim repayment of those costs from the debtor in the insolvency proceeding.

Please note that under certain special conditions, in compulsory settlement proceedings the Insolvency Act also permits the formation of the committee of secured creditors. In such case, all secured creditors holding secured claims against the debtor are members of this committee.

Enforcement of estate’s rights
If the liquidator has no assets to pursue a claim, may the creditors pursue the estate’s remedies? If so, to whom do the fruits of the remedies belong? Can they be assigned to a third party?

According to the Insolvency Act, the creditors themselves may pursue the bankruptcy estate’s legal remedies related to clawback claims and liability claims against former members of the management. In such cases, the creditors may file legal remedies in their own name, but always solely for the account of the bankruptcy estate, who shall be the final beneficiary of any fruit resulting from such legal remedy.

Claims
How is a creditor’s claim submitted and what are the time limits? How are claims disallowed and how does a creditor appeal? Can claims for contingent or unliquidated amounts be recognised? Are there provisions on the transfer of claims and must transfers be disclosed? How are the amounts of such claims determined?

In case an invitation of an insolvency proceeding is initiated, the decision of the court on the initiation, together with the call to creditors to lodge their claims into the proceeding, are published on the eObjave portal immediately (see also question 32). The creditors are required to lodge their claims (together with all associated rights of separate settlement towards the insolvent debtor within:

a one-month period following the above-mentioned publication in case of a compulsory settlement proceeding; or
a three-month period following the above-mentioned publication in case of a bankruptcy proceeding.

If a claim is not lodged within the mentioned deadlines:

in case of a compulsory settlement proceeding: the claim of the creditor still exists; however, such creditor does not have any rights in the compulsory settlement proceeding (eg, cannot decide whether the proposal for compulsory settlement made by the debtor is acceptable or not), whereby such creditor is bound by all results and consequences of the successfully completed proceeding (eg, its claim is reduced, prolonged, etc); and
in case of a bankruptcy proceeding: if the claim or associated right to a separate settlement is not lodged, such claim or right ceases.

Following the expiry of the period of lodging of the claims, the administrator shall attest all the lodged claims and associated rights and prepare a list of attested claims that includes the decision on whether the claim is accepted and recognised or rejected. The creditor may: (i) object the decision of the administrator with regard to his or her own claim or right of separate settlement; however, only because of procedural reasons (eg, the administrator has not considered the creditor’s timely lodged claim or right of separate settlement, data on such claim or right are incorrect, etc); or (ii) object against the lodged claim or right of separate settlement of another creditor (eg, claiming such claim is not existing). The administrator has to take a position with respect to such objections and prepare an amended list of lodged claims. Creditors may again file an objection against such list of attested claims (again solely because of certain procedural reasons, eg, their prior objection has not been considered, data on the prior objection are incorrect, etc). Based on the amended list of attested claims and potential objections of creditors filed against such list, the insolvency court decides by a decision on (i) objections of creditors, filed against the amended list of attested claims; (ii) which claims or rights of separate settlement are finally accepted and recognised or rejected; (iii) (only in case of compulsory settlement proceeding) which claims have been plausibly demonstrated; and (iv) (only in bankruptcy proceeding) who (either the debtor or the creditor) shall, in other procedures, exercise a claim to establish the existence or non-existence of a rejected claim.

According to the Insolvency Act, the lodgement of a claim into an insolvency proceeding must include: (i) the exact value of the principal; (ii) if the creditor is also claiming interest – a capitalised value of all interests accrued from the date of the final maturity of the claim up to the date of initiation of the insolvency proceeding; (iii) all costs incurred in relation to enforcement of the claim; (iv) if the creditor has lodged its claim as conditional – the exact description of the conditions precedent or resolutory conditions related with payment of the claim.

Under the Insolvency Act, transfer of lodged claims to a new creditor are allowed. In order to become the party of the proceeding, the acquirer of such claim has to notify the insolvency administrator on the acquisition of the claim and offer sufficient evidence on acquisition thereof (eg, a copy of the agreement on assignment, etc) The price under which the claim was acquired by the new creditor has no influence on the claim of the acquirer of the claim against the insolvent debtor – the acquirer can claim at full face value. Under Slovenian law, interest accrued to the principal of the claim is associated with the principle and shares its status – thus, if the principal is transferred to the new acquirer, the interest is transferred too. The original creditor may therefore not only claim repayment of the interest accrued, without claiming also repayment of the principal.

Set-off and netting
To what extent may creditors exercise rights of set-off or netting in a liquidation or in a reorganisation? Can creditors be deprived of the right of set-off either temporarily or permanently?

Under the Insolvency Act, the mutual claims (whereby, as of the date of initiation of the insolvency proceeding, all non-monetary claims are transformed into monetary claims by the law) under the market prices or values at the initiation of the insolvency proceeding are deemed to be set-off by the law. The law does not provide any possibility for the creditors to be deprived of such right.

The provisions on the voluntary preventive restructuring proceeding do not provide any special option for setting off of mutual claims. However, such set-off may be performed based on the agreement between the debtor and the creditor after the restructuring is completed.

Modifying creditors’ rights
May the court change the rank (priority) of a creditor’s claim? If so, what are the grounds for doing so and how frequently does this occur?

Under Slovenian insolvency law, the insolvency court has no competence to modify the rank (priority) of a creditor’s claim. All creditors with claims of the same rank shall always be treated equally.

Priority claims
Apart from employee-related claims, what are the major privileged and priority claims in liquidations and reorganisations? Which have priority over secured creditors?

Apart form the employee-related claims, the Insolvency Act provides the following priority claims:

compensations for accidents related to work for the debtor, and occupational diseases;
taxes and contributions that had to be paid together with salaries or other work-related payments; and
claims related to loans and credit facilities, provided to the debtor under laws on saving or restructuring of legal entities; or suretyships granted for such loans.

According to the Insolvency Act, the priority claims have priority solely against the regular (unsecured) claims of creditors (ie, priority claims are being repaid from the general insolvency estate prior to other unsecured claims). In no case is repayment of such claims prioritised against any secured claim (which are repaid from the value of the assets, subject to the security) and shall be repaid immediately after the repayment of the costs of the bankruptcy proceeding.

Besides the above-mentioned priority claims, the Insolvency Act also recognises super-senior claims of the debtor. These are the claims deriving from contracts concluded by, or other legal transactions executed by, the debtor in the compulsory settlement proceeding that ran prior to the initiation of the bankruptcy proceedings, but was terminated because of the initiation of the bankruptcy proceedings. Such super-senior claims shall be repaid from the general bankruptcy estate; however, prior to the repayment of the priority claims.

Employment-related liabilities
What employee claims arise where employees’ contracts are terminated during a restructuring or liquidation? What are the procedures for termination? (Are employee claims as a whole increased where large numbers of employees’ contracts are terminated or where the business ceases operations?)

Liquidation proceeding

The Companies Act provides no special provisions with regard to termination of employees’ contracts in the liquidation procedure. Thus, general provisions of Slovenian employment law apply in such cases, whereby the entity cannot be liquidated unless all claims of its workers (who become the entity’s creditors) are fully repaid.

Restructuring and compulsory settlement procedure

As the purpose of the restructuring proceedings under the Insolvency Act is to rescue the entity and ensure solid grounds for continuation of its business activities, the Insolvency Act provides no special rules with regard to termination of employees’ contracts in the above-mentioned proceedings. Thus, general provisions of Slovenian employment law apply.

Bankruptcy proceeding

Under the Slovenian Employment Relationship Act (Official Gazette of the Republic of Slovenian, No. 21/13, as amended, hereinafter the Employment Relationship Act), the bankruptcy administrator may, following the initiation of the bankruptcy proceeding, terminate work contracts with all employees whose services shall no longer be needed (some workers may remain employed for the purposes of completion of the already initiated deals) with 15 days’ notice period. Employees are entitled to receive payment of severance pay in accordance with the Employment Relationship Act, whereby their claims are considered as priority claims (see question 38).

In case of termination of employment agreements to a larger number of employees, the administrator has to also inform the trade unions organised by the debtor on anticipated terminations and consult with the trade unions on potential limitations of the number of terminations and acts for mitigation of consequences deriving from anticipated terminations. The administrator must inform the competent office of the Employment Service of Slovenia of the anticipated termination of a larger number of employment contractsl.

Pension claims
What remedies exist for pension-related claims against employers in insolvency or reorganisation proceedings and what priorities attach to such claims?

Under the Insolvency Act, unpaid employer’s contributions to the general Slovenian pension scheme run by the Pension and Disability Insurance Institute of Slovenia (membership is obligatory for all employees who are working in Slovenia) are considered as work-related contributions, which have to be paid together with monthly salary or other work-related payments and hence have the status of priority claim in the bankruptcy proceeding.

Payment of contributions in other forms of pension-related saving schemes (pension savings schemes run by banks, pension funds run by pension insurance companies, etc) are entirely the decision of each individual worker (each worker pays only for himself or herself) and thus are not specifically governed by the Insolvency Act.

Environmental problems and liabilities
Where there are environmental problems, who is responsible for controlling the environmental problem and for remediating the damage caused? Are any of these liabilities imposed on the insolvency administrator personally, secured or unsecured creditors, the debtor’s officers and directors, or on third parties?

Under the Insolvency Act, the costs of environmental remedies or damages caused by past business activities of the debtor are deemed costs of the insolvency proceeding and shall thus be covered in full from the general bankruptcy estate, prior to its distribution to creditors. If the funds available in the estate do not suffice for financing such environmental remedies, the bankruptcy proceeding is concluded without distribution of the estate to the creditors (the entire estate is used for financing of environmental remedies), while the financing of the remaining required remedies is taken over by the Republic of Slovenia (and financing of those from its budget).

Liabilities that survive insolvency or reorganisation proceedings
Do any liabilities of a debtor survive an insolvency or a reorganisation?

Under the Insolvency Act, the general consequence of a completed insolvency or restructuring proceeding is that the remainder of any creditor’s claim (ie, a part of the claim that is not repaid by the debtor in accordance with the terms of the insolvency or restructuring proceedings) does not cease but is transformed into a natural obligation whose repayment cannot be claimed (by way of official, legal proceeding) by the creditor anymore, but still can be validly fulfilled by its debtor (or by any third person in their name and for their account of the debtor) voluntarily.

In case of a concluded bankruptcy proceeding, the claims of the creditors are revived (to the value, not been repaid through the previous proceeding) should new additional assets of the debtor be found after the conclusion of the bankruptcy proceeding.

Distributions
How and when are distributions made to creditors in liquidations and reorganisations?

Liquidation proceeding

Under the Companies Act, the distribution of the assets of the liquidated entity is performed only after the liquidator actually liquidates all assets of the respective entity and on this basis establishes that the assets suffice for repayment of all creditors. Based on this assessment, the liquidator issues a liquidation report, which is reviewed and confirmed by the general meeting of the shareholders. The actual distribution of assets must follow within 30 days of the confirmation of the distribution plan by the general meeting of shareholders.

Voluntary preventive restructuring proceeding

Under the Insolvency Act, in case of a restructuring, there is no general distribution of the assets. The restructured financial claims of the financial creditors are being repaid regularly, in accordance with the terms and provisions of the confirmed agreement on the financial restructuring.

Bankruptcy proceeding

The Insolvency Act provides for the following distributions of the bankruptcy estate (whereby the conditions for such distribution may vary):

priority distribution (ie, the distribution of the bankruptcy estate in which the priority claims are repaid) shall be made as follows:
the first priority distribution is whenever there is sufficient cash available in the bankruptcy estate for payment of at least half of the value of recognised, unsecured, duly lodged priority claims; and
any further priority distribution is whenever the value of the estate suffices for repayment of at least 10 per cent of the value of recognised, unsecured, duly lodged priority claims;
general distribution (ie, the distribution of the bankruptcy estate, in which the unsecured claims are repaid) shall be made as follows:
the first distribution is to be made when the value of the estate suffices for repayment of at least half of the value of recognised, unsecured, duly lodged claims (if this situation arises prior to six months after the initiation of the bankruptcy proceeding);
in other cases when the value of the estate suffices for repayment of at least 10 per cent of the value of recognised, unsecured, duly lodged claims; or
every further distribution has to be made when the value of the estate suffices for repayment of at least 10 per cent of the value of recognised, unsecured, duly lodged claims;
distribution of special bankruptcy estate (ie, the distribution of the financial means, gathered by selling of the assets of the debtor, on which the right to a separate settlement exists) shall be made within eight days of receipt of the full purchase price for the sold assets.

Secured lending and credit (immovables)
What principal types of security are taken on immovable (real) property?

According to the currently valid Slovenian Law of Property Code (Official Gazette of the Republic of Slovenia, No. 87/2002, as amended, hereinafter Law of Property Code) a mortgage is the only type of security taken on immovable property. The mortgage is validly created and established solely after it is registered in the Land Register. Under the Law of Property Act, there are two types of mortgage – a regular mortgage and a directly enforceable mortgage. The latter is established on the basis of an agreement, entered into in the form of a directly enforceable notarial deed and its major advantage is that it can be directly enforced in case the debtor falls into a delay in the fulfilment of its obligations (in case of a regular mortgage, the creditor must file a law suit to ensure the enforcement of the established mortgage).

Secured lending and credit (movables)
What principal types of security are taken on movable (personal) property?

The principal types of security that are taken on movable (personal) property under the Slovenian law are as follows:

Lien – pursuant to the Slovenian Law of Property Code, a lien may be established on each movable, whereby the latter is transferred into possession of the creditor.
Non-possessory lien – the Slovenian Law of Property Code provides that a lien may be established on a movable without transferring the latter into the possession of the creditor (the movable remains in possession of the debtor). A non-possessory lien is established on the basis of an agreement entered into between the debtor and the creditor in the form of a directly enforceable notarial deed. In certain cases, when a special register of non-possessory liens exists (eg, a register of liens on stocks, equipment, vehicles, cattle, railway carriages, etc), such lien is, however, established only after being registered in this register.
Retention of title – pursuant to Slovenian Obligations Code (Official Gazette of the Republic of Slovenia, No. 83/2001, as amended, hereinafter Obligations Code) a seller of movable property may retain the title over such movable until full repayment of its purchase price. If the bankruptcy proceeding is initiated over the purchaser, the retention right of the seller can only be invoked if the signature of the purchaser on the agreement, establishing the retention right, was notarised.
Retention right – pursuant to the Obligations Code, a seller may retain in his or her possession a movable until full repayment of its purchase price.
Fiduciary transfer of assets – under fiduciary transfer of assets, a debt is secured by transfer of certain movables to the creditor (acting as fiduciary), possession of which is, however, retained by the debtor.
Fiduciary transfer of receivables – a fiduciary transfer of receivables owed to the debtor by their own debtors.

Transactions that may be annulled
What transactions can be annulled or set aside in liquidations and reorganisations and what are the grounds? Who can attack such transactions?

Liquidation proceeding

Under the Obligations Code, each creditor may claim annulment of certain acts performed by the debtor to the detriment of its creditors. A legal act shall be deemed to have been done to the detriment of creditors if, because of the act, the debtor does not have sufficient assets to fulfil the creditor’s claim.

A disposal of assets against a payment may be challenged by any debtor if the fact that the creditors were being damaged by such disposal was known or should had been known to the debtor and the third person with whom or for whose benefit the disposal was performed. If this third person is the debtor’s spouse or is related to the debtor, it shall be presumed that such person knew that through such disposal the debtor was acting to the detriment of the creditors.

For disposals of assets and equivalent legal acts free of charge, the debtor shall be deemed to have known that such disposal was to the detriment of the creditors, and the matter of whether the third person knew or should have known of such shall not be a requirement for a challenge thereto.

The deadline for filing of the lawsuit challenging the disposal is, in the case of disposal against the payment, one year and, in the case of free of charge disposals, three years, following the day when the disposal has been performed.

Bankruptcy proceeding

In case of a bankruptcy proceedings, the above cited rules on changeability of the debtor’s disposals do not apply, but the special rules on clawback actions in the bankruptcy proceedings are as provided in the Insolvency Act.

These special rules apply to all legal transactions and other legal actions that the debtor in bankruptcy has concluded or carried out in the period as of the beginning of the 12 months prior to the introduction of bankruptcy proceedings up to the initiation of bankruptcy proceedings (the ‘challengeable period’).

Any legal action of the debtor in bankruptcy, carried out within the challengeable period, shall be challengeable:

(i) if the consequences of such action are:

either a decrease in the net value of assets of the debtor in bankruptcy, so as to enable other creditors to receive payment for their claims in a smaller portion than if the action had not been done; or
a person to the benefit of whom the act has been executed has acquired more favourable payment conditions for a claim against the debtor in bankruptcy; and

(ii) a person to the benefit of whom the act was executed, at the time when such act has been executed, was aware of, or should have been aware of the fact that the debtor was insolvent.

A legal action of a debtor in bankruptcy on the basis of which another person came into possession of the debtor’s assets without being liable to execute its counter-fulfilment, or for a counter-fulfilment of small value, shall be challengeable irrespective of the satisfaction of the condition provided for in point (ii) above.

Further to the above, if a creditor to the benefit of whom an action was carried out does not prove otherwise, it shall be considered that the condition referred to in point (i) above is satisfied if:

(i) the action was carried out in order to fulfil the liabilities of the debtor in bankruptcy on the basis of a bilateral contract or another bilateral legal transaction to the benefit of the creditor who performed the counter-fulfilment prior to the performance of the debtor in bankruptcy;

(ii) the creditor, as a result of a legal action of the debtor in bankruptcy, acquires the position of a creditor with the right to separate settlement concerning payment of the claim that arose prior to such act being performed; or

(iii) if the act has been performed during the course of the compulsory settlement proceedings contrary to the general prohibition of entering into any new business activities.

If the creditor to the benefit of whom an action was carried out does not prove otherwise, it is considered that the condition referred to in point (ii) above is satisfied, if:

the creditor has received fulfilment of a claim prior to its maturity, or has received fulfilment in a form and manner that, according to business practices, usages or practice that existed between the creditor and the debtor in bankruptcy, is not considered as a normal form or manner of fulfilment of liabilities based on legal transactions having characteristics equal to those of the legal transaction that represented the basis for the execution of fulfilment of the debtor in bankruptcy; or
the action was carried out within the last three months prior to the introduction of bankruptcy proceedings.

A clawback lawsuit shall be filed within 12 months of the publication of the notice of initiation of bankruptcy proceedings. If the clawback procedure is successful, the creditor who has acquired on the basis of such act any fulfilment of its claim, shall return to the debtor in bankruptcy what he or she has received on the basis of the challenged legal action, and if this is no longer possible, pay financial compensation at prices valid at the time of the issue of this court decision.

Equitable subordination
Are there any restrictions on claims by related parties or non-arm’s length creditors (including shareholders) against corporations in insolvency or reorganisation proceedings?

Beside the claims that the related parties have under the general provisions of the Companies Act on capital maintenance, the Insolvency Act provides no such specific restrictions. Rules and regulations on changeability as described in question 46 should be taken into consideration.

In general, the assets of a parent (and also affiliated) company shall always be separated from the assets of subsidiaries (and affiliates). The Insolvency Act therefore does not contain any provisions regarding responsibilities of a parent or affiliated company in case an insolvency proceeding is initiated over one of the group companies.

Generally, according to the Companies Act, if a controlling company causes a controlled company to enter into a transaction or to undertake or refrain from undertaking any act that is disadvantageous for such controlled company, without compensating such disadvantage by the end of the financial year or granting to the controlled company an entitlement to any measures serving as compensation for this, such controlling company shall be liable for any damage incurred to the controlled company.

Combining parent and subsidiary proceedings
In proceedings involving a corporate group, are the proceedings by the parent and its subsidiaries combined for administrative purposes? May the assets and liabilities of the companies be pooled for distribution purposes?

The Insolvency Act does not provide any special procedural rules regarding the simultaneous insolvency proceedings against a parent and its subsidiary company. The proceedings remain independent of one another and the assets and liabilities are not combined.

Recognition of foreign judgments
Are foreign judgments or orders recognised and in what circumstances? Is your country a signatory to a treaty on international insolvency or on the recognition of foreign judgments?

The Insolvency Act includes rules on cross-border insolvency proceedings.

These provisions apply insofar as no international treaty or the EU Council Regulation (EU) 848/2015 on Insolvency Proceedings is applicable in the respective case.

Most importantly, assets located outside Slovenia may become subject of the insolvency proceedings in Slovenia. Further, Slovenian courts will recognise and enforce foreign insolvency proceedings insofar as the standards of the foreign insolvency proceeding are comparable to Slovenian insolvency proceedings and provided that the debtor’s centre of main interests (COMI) is located in the country where such proceedings took place.

Directives 2001/17/EC on the reorganisation and winding up of insurance undertakings (replaced by Directive 2009/138/EC) and 2001/24/EC on the reorganisation and winding up of credit institutions were both implemented in the Insolvency Act.

UNCITRAL Model Law
Has the UNCITRAL Model Law on Cross-Border Insolvency been adopted or is it under consideration in your country?

Slovenia fully adopted the UNCITRAL Model Law on Cross-Border Insolvency in 2007.

Foreign creditors
How are foreign creditors dealt with in liquidations and reorganisations?

Generally, foreign creditors are treated on an equal footing with Slovenian creditors and may use all legal remedies provided under the Insolvency Act for protection of their legal status. Under the Insolvency Act, however, the foreign creditors shall be informed directly by the administrator on initiation of the bankruptcy proceedings.

Cross-border transfers of assets under administration
May assets be transferred from an administration in your country to an administration of the same company or another group company in another country?

According to article 49 of EU Council Regulation (EU) 848/2015 on Insolvency Proceedings, any assets remaining in Slovenia can be transferred to the administrator in another EU member state only if all claims in Slovenian insolvency proceedings have been repaid.

Other than such transfer of surplus assets, Slovenian law does not provide any mechanism to transfer assets subject to insolvency proceedings in Slovenia to an administration in another country.

COMI
What test is used in your jurisdiction to determine the COMI (centre of main interests) of a debtor company or group of companies? Is there a test for, or any experience with, determining the COMI of a corporate group of companies in your jurisdiction?

Under the Insolvency Act, if not proofed otherwise, the country of the company’s registered seat is deemed as the COMI.

Cross-border cooperation
Does your country’s system provide for recognition of foreign insolvency proceedings and for cooperation between domestic and foreign courts and domestic and foreign insolvency administrators in cross-border insolvencies and restructurings? Have courts in your country refused to recognise foreign proceedings or to cooperate with foreign courts and, if so, on what grounds?

The Insolvency Act permits recognition of foreign insolvency proceedings. Generally, recognition of these proceedings is subject to general rules on the recognition and implementation of foreign court rulings provided for by the act governing international private law and procedure and special rules provided by the Insolvency Act.

A foreign insolvency proceeding is recognised in Slovenia on the basis of the request by the foreign insolvency administrator if:

all required documentation (ie, a certified copy of the decision of the foreign court on the initiation of insolvency proceedings, or a statement by the foreign court certifying that foreign insolvency proceedings have been initiated and a foreign administrator has been appointed and a request for recognition in the form of a statement of the foreign administrator indicating all the foreign insolvency proceedings conducted against the debtor of which he or she is aware) is attached to the request for recognition;
the procedure that is the subject of the request for recognition has the characteristics of foreign court insolvency proceedings (ie, court or administrative procedure conducted in a foreign country for the joint account of all creditors of the debtor because of financial restructuring or liquidation of the debtor, and under the supervision of which of the realisation of the assets and management of operations of the debtor shall be carried out by a foreign court or an administrator appointed by a foreign court);
a foreign administrator has the position of the foreign administrator;
the debtor has his or her centre of main interests or establishment in the foreign country in which the procedure is conducted that is the subject of the request for recognition; and
if no obstacles exist for the recognition (ie, negative impact on the sovereignty, safety and the public interest of the Republic of Slovenia).

Cross-border insolvency protocols and joint court hearings
In cross-border cases, have the courts in your country entered into cross-border insolvency protocols or other arrangements to coordinate proceedings with courts in other countries? Have courts in your country communicated or held joint hearings with courts in other countries in cross-border cases? If so, with which other countries?

We are not aware of any such protocols or hearings.

Updates and trends

The Insolvency Act has undergone several substantial amendments since it entered into force in October 2008 and reflects all good practices, which have proven useful in comparable legal systems across Europe.

Therefore, there exist no plans for any new amendments in the near future. Notwithstanding the aforesaid, there are, however, discussions to improve organisation of the sale processes in insolvency proceedings. The general idea is to enhance use of the online bidding portals for selling auctions in insolvency proceedings, which would enable presence and bidding to a much wider audience and at the same time considerably lower the costs of such proceedings.

Bankruptcy all aspects of insolvency issues

Get in touch:

HALTIS LEGAL

Bankruptcy all aspects of insolvency issues

Get in touch:

HALTIS LEGAL

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