Temporary bankruptcy protection will be extended
The Justice Ministry prepared legislation extending the temporary bankruptcy protection. The current protection scheme, approved as part of the pandemic assistance to companies, will be in place until October and the government may extend it until the end of this year. Starting in January 2021, such protection would need the approval of a majority of creditors and a restructuring advisor would need to prepare an independent analysis of the viability of a given debtor’s operations. The new protection would be capped at six months, during which time debtors will be allowed to come to an agreement with creditors on the amount of any write-off (standard debt restructuring caps the write-off at 50%).
The Ministry also came up with rules for a low-cost and quick bankruptcy for small companies with less than €1m assets.