Bankruptcy proceedings in Slovakia grew by 40 percent in 2009

District courts in Slovakia opened 600 bankruptcy proceedings last year, up 39.9 percent from the previous year, the SITA newswire reported.

District courts in Slovakia opened 600 bankruptcy proceedings last year, up 39.9 percent from the previous year, the SITA newswire reported.

Justice Ministry data show that the number of declared receivership proceedings rose as well, by 10 percent to 276 last year. The executive director of the Business Alliance of Slovakia, Robert Kičina, ascribes the increase of initiated and declared bankruptcy proceedings to the economic crisis, which has adversely affected the economic situation of most businesses in Slovakia.

The courts register an increase in the number of completed bankruptcy proceedings as well which rose 44 percent to 288, SITA wrote. The most frequent reason for ending the procedure was the company’s insufficient assets.

“The high number of bankruptcy proceedings halted due to insufficient property confirms the fact that Slovakia’s bankruptcy law is toothless, unable to secure even minimal recovery of claims from bankrupt companies for most creditors,” Kičina said in commenting on the figures.

Last year, the courts received a total of 1,060 proposals to declare a company bankrupt. Compared with 2008, their number rose by 26 percent. The Justice Ministry, however, says that the figures do not reveal the real number of debtors who have submitted proposals to declare a company bankrupt. The reason is that several creditors can submit such proposals against the same company.

In 2009, firms showed more interest in having their economic problems resolved via restructuring. In 2008 the courts registered 15 requests for restructuring and in 2009 the number grew to 78. Courts allowed 58 restructuring processes. SITA

Compiled by Zuzana Vilikovská from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.

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