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located in the area where the debtor’s principal place of business is reg-
istered at the trade registry. After initiation, the debtor will receive a
payment order, which gives notice that the creditor may file a bank-
ruptcy lawsuit unless the debt is paid within 7 days or an objection is
submitted before the execution office. If the debtor submits an objec-
tion, then the creditor may initiate a lawsuit for cancellation of the
objection. At the end of the judgment, the court may accept the case
and decide to declare the debtor bankrupt. As is known, declaration of
bankruptcy means that all of the debtor’s assets will be organized to
pay all their debts.
According to Article 177 EBL, the creditor may also file a lawsuit
for bankruptcy directly against the debtor where the debtor suspends
the payments, runs away, makes fraudulent transactions or hides assets
from creditors.
However, the debtor may also initiate a lawsuit for the postpone-
ment of bankruptcy. The representatives of the company or any of its
creditors may request postponement of bankruptcy, i.e. where bank-
ruptcy is deferred until a more in-depth review of the actual financial
situation is conducted. Postponement of bankruptcy will only be con-
sidered when the company submits to the court a proposal to restruc-
ture its financing, primarily to the benefit of its creditors. Should the
court consider the restructuring plan viable, it may grant the company
bankruptcy postponement for a period of one year. The postponement
period may be extended, subject to the determination of the courts but
shall not exceed four years. The court that rendered the decision to
postpone bankruptcy may take all necessary measures to protect the
assets of the company and may appoint a trustee upon making its deci-
sion. If the court does not accept the restructuring plan or is convinced
that the debtor company cannot continue its activities, then the court
will dismiss the request for postponement and decide to open the
debtor’s bankruptcy proceeding because in such a lawsuit the claimant
claims that the debtor ran into debt and the debtor will go bankrupt if
it is not postponed.
Some restrictions are imposed on creditors enforcing their rights
over companies under postponement of bankruptcy. For example, dur-
ing the postponement period, no proceedings may be filed against the
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NEWSLETTER 2014