Purpose of conducting insolvency proceedings
The purpose of conducting insolvency proceedings is to satisfy the claims of creditors of a trader who is insolvent or over-indebted. This can only be achieved if these claims are filed in the opened insolvency proceedings of the respective trader.
Insolvency proceedings are opened by decision of the district court at the seat of the trader, and from the date of registration of the decision in the Commercial Register and Register of Non-profit Legal Entities (CRRJLNE), the deadlines for filing claims begin to run.
Filing of claims
When you have a claim against a debtor – trader and insolvency proceedings are opened against them, you should file your claims before the court where the proceedings were opened, namely the district court at the seat of the debtor.
All evidence certifying the claim and its due nature should be attached to the application, and a copy of it together with the evidence should also be submitted to the trustee appointed in the proceedings. The application should specify the existence of privileges and securities for the claim (for example, mortgage, pledge, etc.)
- Deadlines for filing claims. Additional deadline:
The deadline for filing claims is one month, counted from the date of registration of the decision to open proceedings in the CRRJLNE.
If this deadline is missed, the creditor has a new two-month period in which to file their claims, but loses the right to contest an already accepted claim of another creditor or a distribution of liquidated assets that has been carried out. The costs incurred in connection with the acceptance of their claim also remain at their expense. The two-month period begins to run from the day of expiration of the one-month period.
- Consequences of non-compliance with the deadline:
If the deadlines are not observed, the right to file claims arising before the date of opening of insolvency proceedings is lost.
Claims unpaid at maturity and arising after the date of opening of insolvency proceedings until the approval of a recovery plan may be filed in the proceedings, and the trustee compiles an additional list for them.
Lists of accepted, rejected and officially accepted claims
After the expiration of the deadlines for filing claims, the trustee prepares lists of accepted, rejected and officially accepted claims that were received within the one-month period and respectively additional lists of accepted, rejected and officially accepted claims submitted within the two-month additional filing period. The lists contain the amount and order of satisfaction of the claim.
Officially accepted claims are claims of a worker or employee arising from an employment or terminated employment relationship with the insolvent trader, as well as public claims established by a final act.
The lists prepared by the trustee are published in the CRRJLNE under the file of the insolvent trader.
With the publication of the lists, a 7-day period begins for contesting them through an objection, which may be filed by both a creditor and the debtor.
A claim established by a final court decision rendered after the date of the decision to open insolvency proceedings and in which the trustee participated cannot be contested.
The court rules with an explicit order approving the lists. When objections are filed against the lists, the court rules on the approval of the lists after reviewing the objections. When an objection is upheld, the court makes a change in the respective list of claims.
The accepted claims also function in the distribution of creditors’ votes when voting on decisions in insolvency proceedings.
IMPORTANT: When the court issues a decision to open insolvency proceedings in the absence of funds to cover the initial costs of conducting the proceedings, and accordingly issues a stay of the case, the deadline for filing claims does not run!
More similar topics can be found in the “Commercial and Corporate Law” section.
Solo Law Firm “Silvia Petkova” has competent and experienced commercial law attorneys.
Legal consultations on-site at the office or by phone are provided only by prior appointment.
If you need legal assistance regarding filing claims in opened insolvency proceedings of a trader, as well as in the field of commercial and corporate law, you can contact us at the following
Solo Law Firm “Silvia Petkova”
address: Sofia, “Tri Ushi” St. No. 2, floor 3
tel. 0885 47 77 57
email: office@petkovalegal.com
working hours: Monday to Friday from 10:00 to 18:00
or through the form below:
author: Toma Tomov