Entrepreneurs in financial difficulties will be able to ask the court for temporary protection from creditors.
The law provides aid to entrepreneurs with the status of an “entrepreneur under temporary protection”. The aid comprises the following:
– interruption of the proceedings regarding the creditor’s application for the entrepreneur’s insolvency filed after 12 March 2020,
– suspension of the entrepreneur’s obligation to file for insolvency,
– suspension of enforcement proceedings against entrepreneurs initiated after 12 March 2020,
– granting temporary protection against the exercise of liens,
– regulation of the rules on the set-off of claims,
– inability to terminate or withdraw from the contract or inability to refuse to perform the contract due to delay in contract performance by an entrepreneur under temporary protection; the delay in contract performance must have occurred between 12 March 2020 and 12 May 2020,
– interruption of the periods for asserting the right against an entrepreneur under temporary protection.
An entrepreneur can apply for temporary protection electronically to the court specified by law. We recommend that the entrepreneur be legally represented.
After the court grants the temporary protection, the entrepreneur
– is obliged to give priority to the common interest of creditors over his own interests,
– must not distribute the profit or any other equity,
– is obliged to refrain from disposing of the company’s assets,
– is obliged to pay, in priority, the liabilities relating to the maintenance of the company’s operations.
Loans or similar payments granted to the entrepreneur during the temporary protection are subject to a special regime.
The temporary protection is to last until 1 October 2020 at the latest, but the Slovak Government may extend this period until 31 December 2020.
The court may revoke the temporary protection of an entrepreneur at any person’s request, provided the request is duly justified.