The amendments to the Hungarian Bankruptcy Act enter into force on 1 August 2020, aiming at modernizing the rules of the insolvency law, maintaining employment and facilitating the agreement between the creditors and the debtor in the course of the bankruptcy and liquidation proceedings.
In order to accelerate and simplify the proceedings, the amendments to the Bankruptcy Act ensure electronic communication between the creditors or between the various parties in the procedure and the administrator or the liquidator. The information, declaration or document sent by electronic means must be sent to the addressee as a private document with full evidence force or as a document converted into electronic document form under the Act on Attorneys.
The amendments also enable the liquidator to conduct the creditors’ meeting without personal presence, following the identification of the participants by technical means allowing picture and voice transmission. In addition, from 1 August 2020, the subjective deadline of 120 days from the date of gaining knowledge will be terminated in case of a challenge before the court of the legal transactions made by the ex-managers and harming the interest of the creditors. Furthermore, the moratorium period in the bankruptcy proceeding is significantly increased from 120 to 180 days.
It is also new that in case of a major economic entity of preferential status for strategic considerations, in the liquidation proceeding the Hungarian State has pre-emption right in the course of the sale of the assets of the debtor.
By Lidia Suveges, Attorney at law, KCG Partners Law Firm