New Restructuring Regime In Hungary

The arrival of the eagerly awaited Restructuring Act

Due to the transposition of Directive (EU) 2019/1023 through the Restructuring Act, which entered into force on 1 July 2022, a new preventive restructuring framework under Hungarian law is now applicable.¹

Objective of restructuring generally

The essence of restructuring is that companies in financial difficulties, when there is a likelihood of insolvency with a view to preventing the insolvency and ensuring the economic viability of the company, enter into negotiations with some or all of their creditors and include the results of these negotiations in a restructuring plan.

Novelties of the new act in a nutshell

• According to the new restructuring rules, the debtor may decide on restructuring if there is a likelihood of insolvency. A likelihood of insolvency means a situation in which there are reasonable grounds for believing that the debtor will be unable to meet its outstanding payment obligations