When a director pays the company’s debts: three routes for creditors

Enforcement stopped for lack of assets, unanswered correspondence and an s.r.o. awaiting deletion: to a creditor, this looks like a lost claim. That is not always the end. The law recognises situations in which a company’s director answers with personal assets. We have separately discussed how the proposed Civil Code recodification may change directors’ position. This article concerns tools available to creditors today: two Slovak routes and one Czech route.

First route: a late bankruptcy petition

The statutory body must petition for bankruptcy within 30 days of learning, or when exercising professional care it could have learned, that the company is insolvent (section 11(2) of Bankruptcy and Restructuring Act No. 7/2005 Coll.). A person breaching that duty is directly liable to creditors for resulting loss under section 11a. The creditor sues in its own name without waiting for the insolvency administrator.

The law substantially eases the creditor’s burden of proof. A petition is presumed late, among other circumstances, where bankruptcy was never declared because assets were insufficient, where it was cancelled for that reason, or where enforcement against the debtor ended for lack of assets. A presumption also applies to the amount of loss:

Unofficial English translation: Unless a different amount of loss is proved, the creditor is presumed to have suffered loss to the extent that its claim remained unsatisfied after bankruptcy proceedings were discontinued for lack of the debtor’s assets, bankruptcy declared over the debtor’s assets was cancelled for lack of assets, or enforcement or comparable execution proceedings against the debtor were terminated for lack of assets. — Section 11a(3) of Act No. 7/2005 Coll.

The defendant director therefore bears the burden of proving a different amount. The creditor’s claims become time-barred no earlier than one year after those proceedings end. Acting soon after termination is worthwhile while evidence remains fresh.

Second route: the creditor pursues the company’s claim

Managing directors are liable to the company for loss caused by breaching their duties. Section 135a of the Commercial Code requires professional care and prohibits prioritising personal interests over those of the company. The claim belongs to the company, but a creditor need not watch a company controlled by the same director fail to pursue it:

Unofficial English translation: A creditor of the company may pursue the company’s claims for damages against managing directors in its own name and for its own account if it cannot satisfy its claim from the company’s assets. — Section 135a(5) of Act No. 513/1991 Coll.

Creditors’ claims survive even if the company waives its damages claim against the director or settles it. Once bankruptcy is declared, the administrator pursues them. The Commercial Code underwent a major amendment by Act No. 29/2026 Coll., effective on 17 August 2026. This rule remains unchanged, and section 135a continues to apply in the quoted form.

The Czech route: liability for company debts and late insolvency petitions

Claims against Czech companies involve two statutes. Under section 159(3) of the Czech Civil Code (Act No. 89/2012 Coll.), a member of an elected corporate body who has not compensated the company for loss caused by breach of duty is liable as a statutory guarantor to its creditor for the debt, up to the uncompensated loss, if the creditor cannot obtain payment from the company itself. Section 98 of the Czech Insolvency Act (Act No. 182/2006 Coll.) also requires directors to file an insolvency petition without undue delay after they knew or should have known of insolvency. Under section 99, they are liable for the difference between the established amount of the creditor’s filed claim and the amount actually received in insolvency proceedings.

The Czech Supreme Court demonstrated the strictness of this approach in judgment 29 Cdo 2538/2024 of 29 April 2026. Board members transferred company receivables to their own companies and handed over the collection documents. The agreements later proved invalid and the receivables returned to the insolvency estate. Nevertheless, the Supreme Court held that loss could already have arisen when the unlawful conduct made due receivables temporarily unenforceable: the company temporarily lost the ability to collect them. Neither their later return to the estate nor the insolvency administrator’s inaction broke the causal link.

Where to start while there is still time

Start with a timeline. Financial statements in the register and enforcement records should establish when the company became insolvent, when your claim arose and when proceedings ended for lack of assets. These dates determine the available route, burden of proof and limitation period. If bankruptcy proceedings are ongoing, protect your claim within them. Our advice on filing a claim in bankruptcy summarises the procedure, while is a managing director liable for an s.r.o.’s debts? provides an overview.

Liability proceedings against directors require substantial evidence, and delay works against the creditor. Our debt recovery service includes examining the debtor’s assets and history through a debtor creditworthiness review. We pursue the claim against the director through litigation representation.