INSOLVENCY

Objective

To provide employees in the legal departments of companies entering the Hungarian market with a comprehensive understanding of insolvency law, focusing on procedural steps, rights of creditors, and obligations of debtors. This knowledge will empower them to navigate insolvency situations confidently and protect their companies’ interests in the Hungarian legal environment.

overview

1. Introduction to Insolvency Law in Hungary

Objective: Familiarize participants with the core concepts and legal framework governing insolvency in Hungary, emphasizing the relevance to businesses.

1.1 Overview of Hungarian Insolvency Law

Topics: Legal definition of insolvency, relevant statutes (e.g., Hungarian Insolvency Act, Bankruptcy Act), main players (debtors, creditors, insolvency administrators), and types of insolvency procedures (bankruptcy, liquidation).


Why it’s important: Provides a foundational understanding of the legal context in which insolvency occurs in Hungary, setting the stage for deeper exploration.

1.2 Bankruptcy vs. Liquidation Procedures

Topics: Differences between bankruptcy and liquidation processes, their implications for businesses, and when each procedure is applied.


Why it’s important: Legal teams must recognize the appropriate procedure for different insolvency scenarios to minimize risks and maximize recoveries.

2. Insolvency Procedure Step-by-Step

Objective: Equip participants with the detailed knowledge of how insolvency procedures unfold, from initiation to conclusion.

2.1 Initiating Insolvency Proceedings

Topics: Legal criteria for declaring insolvency, filing processes for creditors and debtors, necessary documentation, court involvement.


Why it’s important: Understanding the procedural requirements and potential legal pitfalls at the outset is crucial for minimizing delays and legal challenges.

2.2 Role of the Insolvency Administrator

Topics: Powers and responsibilities of insolvency administrators, their interaction with creditors and debtors, oversight mechanisms.


Why it’s important: Legal teams need to understand how administrators operate to effectively negotiate or contest their decisions.

3. Creditor Rights and Recovery Mechanisms

Objective: Provide participants with strategies to protect and enforce creditor rights during insolvency proceedings, including recovery options.

3.1 Secured vs. Unsecured Creditors

Topics: Prioritization of claims, legal rights of secured creditors, negotiating with unsecured creditors, potential for debt recovery.


Why it’s important: Prioritization of claims can significantly impact recovery; knowing how to maximize a company’s position is essential.

3.2 Debt Restructuring and Settlement Agreements

Topics: Legal framework for debt restructuring in insolvency, voluntary agreements with creditors, court-approved settlement plans.


Why it’s important: Companies often seek to restructure debts rather than undergo liquidation; understanding how to negotiate and finalize agreements can save businesses.

4. Cross-Border Insolvency Considerations for Foreign Companies

Objective: Explore cross-border insolvency issues that foreign companies may encounter when dealing with Hungarian partners, with a focus on EU regulations.

4.1 EU Insolvency Regulation (Recast)

Topics: Cross-border recognition of insolvency proceedings within the EU, jurisdictional issues.

 

Why it’s important: Foreign companies must understand how insolvency rulings in Hungary will be treated abroad and vice versa.

4.2 Cross-border Debt Recovery Strategies

Topics: Methods for recovering debts from insolvent companies across borders, enforcement of judgments, and practical strategies for companies.


Why it’s important: Legal teams must ensure their companies can effectively recover assets and enforce judgments even when dealing with foreign jurisdictions.

5. Post-Insolvency Procedures and Preventative Measures

Objective: Discuss post-insolvency scenarios and how companies can mitigate risks through strategic preventative measures.

5.1 Post-Insolvency Litigation and Recovery

Topics: Legal recourse after insolvency is declared, potential for clawback actions, pursuing additional claims, and fraud prevention.


Why it’s important: Legal teams must remain vigilant to protect their company’s rights after insolvency, particularly if fraud is suspected.

5.2 Risk Mitigation and Early Warning Systems

Topics: Setting up internal early warning systems, monitoring business partners for insolvency risks, and legal steps to mitigate potential losses.


Why it’s important: Preventative measures can save companies from dealing with insolvency in the first place by identifying risks early.

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