In today's Compliance article, we'll discuss the issue of company liquidation and its consequences for creditors. This is important because, in the event of a company liquidation, its creditors may no longer be able to satisfy their claims if they don't have a court-certified amount of their debt.
Why is tracking debtor liquidation important?
By way of introduction, "Liquidation" is one of the forms of terminating the activity of a commercial law company.
Article 279 of the Commercial Companies Code specifies a three-month period from the date of the announcement of the company's dissolution and the opening of liquidation for creditors to file their claims against the company. Therefore, if creditors fail to file their claims against the company within three months of the announcement of the opening of liquidation, they may never recover their claims.
How to recover your receivable from a company in liquidation?
Fortunately, the company's creditors who did not submit their claims within the appropriate timeframe or were not known to the company may demand satisfaction of their claims from the company's assets that have not yet been distributed.
Furthermore, liquidation does not prevent the filing of a claim for payment against the company, nor are proceedings initiated before the commencement of liquidation suspended. This option is available to creditors who have a disputed claim against the company. During liquidation, both payment and enforcement proceedings can be initiated, but the potential ineffectiveness of enforcement against the company may also open the door to pursuing claims under Article 299 of the Commercial Companies Code against the company's management board members or its liquidator. There is a widespread belief that if liquidation is initiated, the company will be quickly removed from the register and its liabilities will not have to be repaid. Nothing could be further from the truth. The liquidator attaches a declaration to the application for deletion of the company confirming that there are no pending proceedings against the company. Failure to do so is grounds for rejection of the application for deletion. Furthermore, to secure their claim, a creditor may apply to participate in the proceedings to remove the company from the register, along with a request to suspend these proceedings until the final conclusion of the payment proceedings. Early removal of the company would make it difficult – or even practically impossible – to pursue claims against management board members under Article 299 of the Commercial Companies Code.
In summary, it's important to remember that following company liquidation announcements can have a significant impact on securing the satisfaction of your claim. Simply filing a claim doesn't necessarily mean that the claim will be satisfied, as the company doesn't need to have any assets on the date the liquidation begins. However, this doesn't prevent you from recovering your claim.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of November 23, 2022
authors:
