31.05.2021 11:27
On 3. 3. 2017, the Act no. 64/2017 Coll., amending Act no. 182/2006 Coll., On Bankruptcy and Its Resolution (the Insolvency Act) has been published. The amendment, which is also known as an accreditation amendment, comes into effect as of 1. 7. 2017 with the aim to cater to the needs of practice, particularly to prevent abuse of the insolvency proceedings as a tool of economic competition.
The first interesting change appears in the very definition of bankruptcy, where a new term “coverage gap“ is introduced representing the difference between the outstanding, due and payable financial obligations of a debtor, who is an entrepreneur, and the amount of their available funds set out in the statement of liquidity. If the difference is less than 1/10 of the outstanding financial obligations or if the liquidity outlook compiled in keeping with the implementing regulation shows that the coverage gap is to fall, within the period for which the outlook for liquidity is compiled, under 1/10 of the amount of the outstanding financial obligations, then it is deemed that such a debtor is able to meet their financial obligations.
Another novelty is the introduction of a preliminary assessment of the insolvency petition filed by the creditor. The insolvency court has a new opportunity, if it has reasonable doubts about the legitimacy of an insolvency petition, to rule that the insolvency petition and other documents from the file are not going to be published in the insolvency register. This provision is intended to prevent publication of vexatious insolvency petitions in situations where the publication itself may affect the goodwill and reputation of the alleged debtor.
The rejection of an insolvency petition by an insolvency court due to obvious groundlessness may result in a fine to the applicant of up to CZK 500 000, i.e. 10 times higher than under the previous arrangements. If there is a final rejection of such a petition, the same petitioner may submit a new insolvency petition against the same debtor only 6 months after the court decision to reject the initial petition has become final.
Another important change is the obligation of the debtor who seeks a debt discharge to use a professional who will draft the application on behalf of the debtor (lawyer, notary, court bailiff, receiver or a person accredited to provide debt relief services under the Insolvency Act).
Within their general practice, Felix a spol. provide services in the area of insolvency law.