Author: Aet Sallaste
The amendment of Bankruptcy Act entered into force, where the commencement of the term of the obligation to submit bankruptcy petition shall be suspended for the time of emergency situation due to coronavirus and two months thereafter.
According to the applicable law, the management board of juridical person is obligated to submit bankruptcy petition to the court within twenty days after the date on which the insolvency became evident. Breach of this obligation entails personal responsibility of the management board member.
According to the adopted law amendment, the commencement of the term suspends for the emergency situation and for two months after the end of the emergency situation.
The debtor may submit its bankruptcy petition
The right to submit bankruptcy petition of the debtor shall not be restricted by the law amendment. The authors of the bill find that to postpone the submission of bankruptcy petition is still reasonable only in case there exist real prospects, that the continuation of the activities is possible at the stabilization of the situation with the result of state aid measures or later reorganizational activity.
Who is concerned by the amendment of the Bankruptcy Act?
The amendment shall concern all the persons, who have the obligation to submit bankruptcy petition. It shall affect all the entrepreneurs, i.e. companies and foundations. The purpose of this amendment is to give the entrepreneurs a breathing space to adapt with the emergency situation and for survival, who have got into payment difficulties during the crisis due to coronavirus.
The suspension of the commencement of the term for submission of bankruptcy petition shall apply retroactively from 12th March 2020, when the Government promulgated the emergency situation. The suspension of the bankruptcy petition submission obligation term shall end, when two months have passed after the end of the emergency situation, it is two months after 17th May 2020.