Our customer owes us money and has announced restructuring. What does this mean for our invoice?

Your customer announces that they are entering restructuring, leaving your invoices unpaid. First, establish which procedure is involved. Both judicial restructuring under Act No. 7/2005 Z. z. on Bankruptcy and Restructuring and public preventive restructuring under Act No. 111/2022 Z. z. on Addressing Imminent Insolvency can be found in the Insolvency Register. In judicial restructuring, you can no longer recover the invoice through the usual channels; its treatment will be determined by a plan voted on by creditors and confirmed by the court. In preventive restructuring, the position depends on whether the debtor has been granted temporary protection and whether you are an affected creditor.

Rules applying from the commencement of restructuring proceedings

As soon as proceedings commence, even before restructuring is authorised, enforcement against the debtor’s assets cannot be initiated for a claim that must be lodged by filing a proof of claim, and existing enforcement proceedings are stayed. Such a claim cannot be set off either (Section 114(1), letters b) and f)). You cannot terminate the contract by notice or withdraw from it because of the debtor’s delay in providing performance to which you became entitled before the proceedings commenced (Section 114(1), letter d)). If the contract requires you to perform first, you may withhold performance until the debtor provides or secures the corresponding performance (Section 114(3)). Once restructuring is authorised, the stayed enforcement proceedings are terminated, and court and arbitration proceedings concerning claims subject to lodgement are stayed (Section 118(3) and (4)).

Claims arising against the debtor during restructuring proceedings, for example from further supplies, have priority. They are not lodged, and the plan does not affect them without the creditor’s consent (Section 120(2)).

Lodge the claim within 30 days of authorisation

Restructuring is authorised upon publication of the order in the Insolvency Register (Section 118(1)). The proof of claim must be filed within 30 days of authorisation, electronically on the prescribed form, to the insolvency administrator’s electronic mailbox and with the required electronic authorisation; otherwise, it is disregarded (Section 121 and Section 28(2)). In bankruptcy, late lodgement has less severe consequences, as explained in the question on how and by when to lodge a claim in bankruptcy. A pledge or other security right must be asserted properly and on time in the proof of claim; otherwise, the claim is treated as unsecured (Section 122(1)).

The law expressly sets out the consequence of failing to lodge a claim:

The following quotation is reproduced in its original language:

Zverejnením uznesenia o potvrdení plánu zaniká právo veriteľov, ktorí riadne a včas podľa tohto zákona neprihlásili svoje pohľadávky, vymáhať tieto pohľadávky voči dlžníkovi, ako aj riadne a včas neprihlásené zabezpečovacie práva vzťahujúce sa na majetok dlžníka […]

§ 155 ods. 2 zákona č. 7/2005 Z. z.

Setting off the claim “just in case” instead of lodging it therefore does not help. By contrast, the plan does not affect your rights against the debtor’s guarantors and co-debtors or your right to obtain satisfaction from security provided by a third party (Section 155(4)).

How the plan affects the amount and due date of the claim

The court rejects the plan if any unsecured claim would be satisfied at less than 50 % of its amount or paid over a period longer than 5 years, unless the affected creditor has agreed to this in writing. This rule does not apply to subordinated claims or claims that would be treated as subordinated in bankruptcy (Section 154(1), letters g) and h), and Section 137(5)). Ancillary amounts, such as default interest, arising after restructuring proceedings commenced are not included in the plan and are deemed waived upon confirmation of the plan (Section 138(2)). If the debtor fails to pay you what the plan requires even within 30 days of receiving your demand, the plan ceases to have effect against you in respect of the affected claim (Section 159).

Preventive restructuring

In public preventive restructuring, claims are not lodged. The procedure is based on a list of creditors prepared by the debtor (Section 29(1) of Act No. 111/2022 Z. z.). If you are missing from the list or your claim is recorded incorrectly, ask the debtor to correct or supplement it within 30 days of authorisation. A late request is disregarded (Section 30(1)). If the court has granted temporary protection, enforcement proceedings cannot be pursued against the debtor while it lasts, and, subject to statutory exceptions, you cannot terminate the contract by notice or withhold performance because of a default predating that protection (Section 20(3) and (7)). The plan does not affect, for example, a minor creditor with claims totalling no more than 500 euros, or, up to an amount of 5 000 euros, a small creditor with fewer than 10 employees and both turnover and assets below 2 000 000 euros (Section 27(3) and Section 2(1), letters d) and e)). Non-public preventive restructuring is negotiated only with creditors supervised by the National Bank of Slovakia or a comparable foreign institution and binds only those who have agreed to the plan in writing (Section 50 and Section 54(3)).

We will prepare and lodge your proof of claim in restructuring within the deadline, review the proposed plan with you and represent you at the creditors’ meeting through our lodging a claim in bankruptcy in Slovakia service, which also covers restructuring. Send us the invoices, contract, customer’s notice and details of any security.