THE MOST frequent reasons for entry into insolvency proceedings last year were reduced sales, growing secondary insolvency, and insufficient formation of reserves on the part of businesses.
“Another factor that influenced the development of insolvency proceedings was worse access to bank loans,” said Helena Múdra, authorized representative of Euler Hermes in Slovakia, adding that demand for credit insurance grew last year as well as stricter requirements on insurable risk.
Analysts from Euler Hermes expect secondary insolvency in Slovakia to grow in 2010. The revised law on bankruptcy proceedings and its implementation in practice may influence the number of cases of insolvency.
Euler Hermes originally estimated that approximately 900 companies would have problems with insolvency in 2009. According to the Justice Ministry’s statistical data, there were 784 insolvency proceedings last year, which was 13 percent less than Euler Hermes had predicted. The slow pace of court actions also affected the statistics, the company said.
In 2008, district courts in Slovakia registered 841 filings for bankruptcy, while last year it was 1,060. The number of approved restructuring procedures grew from 10 in 2008 to 58 last year. Also, courts reported a higher number of requests for authorisation of restructuring procedures – 78 were filed last year in comparison to 15 in 2008.
