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Amendments of the Bankruptcy and Liquidation Proceedings

Amendments of the Bankruptcy and Liquidation Proceedings

Hungary
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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

Hungary Knowledge Partner

Nagy és Trócsányi was founded in 1991, turned into limited professional partnership (in Hungarian: ügyvédi iroda) in 1992, with the aim of offering sophisticated legal services. The firm continues to seek excellence in a comprehensive and modern practice, which spans international commercial and business law. 

The firm’s lawyers provide clients with advice and representation in an active, thoughtful and ethical manner, with a real understanding of clients‘ business needs and the markets in which they operate.

The firm is one of the largest home-grown independent law firms in Hungary. Currently Nagy és Trócsányi has 26 lawyers out of which there are 8 active partners. All partners are equity partners.

Nagy és Trócsányi is a legal entity and registered with the Budapest Bar Association. All lawyers of the Budapest office are either members of, or registered as clerks with, the Budapest Bar Association. Several of the firm’s lawyers are admitted attorneys or registered as legal consultants in New York.

The firm advises a broad range of clients, including numerous multinational corporations. 

Our activity focuses on the following practice areas: M&A, company law, litigation and dispute resolution, real estate law, banking and finance, project financing, insolvency and restructuring, venture capital investment, taxation, competition, utilities, energy, media and telecommunication.

Nagy és Trócsányi is the exclusive member firm in Hungary for Lex Mundi – the world’s leading network of independent law firms with in-depth experience in 100+countries worldwide.

The firm advises a broad range of clients, including numerous multinational corporations. Among our key clients are: OTP Bank, Sberbank, Erste Bank, Scania, KS ORKA, Mannvit, DAF Trucks, Booking.com, Museum of Fine Arts of Budapest, Hungarian Post Pte Ltd, Hiventures, Strabag, CPI Hungary, Givaudan, Marks & Spencer, CBA.

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