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The assets of the bankrupt party may be converted to cash either through public tender, sale by auction or direct sale. After the asset conversion procedures are terminated, the administrator will issue a schedule on the distribution of assets to creditors.

Secured creditors whose debts are secured by pledge or retention rights are entitled to have their claims satisfied out of the proceeds of their security. The secured assets are treated as being separate from the bankrupt estate, and the general order of priority for the repayment of creditors does not apply.

Certain claims defined by the Bankruptcy Act can be settled at any time during the bankruptcy proceedings (e.g., claims for the refund of an advance payment for the costs of the proceedings and for the fees of the preliminary bankruptcy administrator, claims for a separate settlement or claims that arose after the declaration of bankruptcy and that became due in the course of bankruptcy proceedings). Other claims may be satisfied only on the basis of distribution order.


The aim of restructuring is to solve the debtor’s insolvency and simultaneously to preserve the debtor’s business as a going concern. In case of threatening or real bankruptcy, a debtor is entitled to appoint a bankruptcy administrator to prepare a restructuring opinion. The administrator may recommend the restructuring of the debtor’s business under the following conditions:

the debtor carries on business activities the debtor is in bankruptcy or bankruptcy is imminent i t m a y b e e x p e c t e d t h a t a s i g n i f i c a n t p a r t o f t h e d e b t o r s e n t e r p r i s e c o u l d b preserved, an e i n t h e c a s e o f a p p r o v a l o f r e s t r u c t u r i n g , i t i s e x p e c t e d t h a t t h e c r e d i t o r s c l a i m s w o u be satisfied to a greater extent than in bankruptcy. l d

Restructuring proceedings commence with a petition for restructuring filed either by the debtor or by a creditor with the debtor’s consent. The court will examine the petition to review whether it meets all requirements and may issue a resolution on the commencement of restructuring proceedings. Afterwards, no later than 30 days from the date of the commencement of restructuring proceedings and after examination of all the supporting documents, the court may issue a restructuring resolution or dismiss the case.

If the court issues a restructuring resolution and the creditors do not fail to elect their representatives (the creditors committee), the debtor (in case it filed the petition)


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