New Slovak legislation on preventive restructuring
– "An ounce of prevention is worth a pound of
cure."
On 16 March 2022, the Slovak Parliament passed the Act on
Resolution of the Imminent Insolvency and on changes and amendments
to certain acts (the Act), implementing the EU
Directive on restructuring and insolvency 1. The Act
became effective as of 1 May 2022; however, most of its provisions
will become effective as of 17 July 2022.
Among other things, the Act introduced a new legislative
framework for preventive restructuring. The preventive
restructuring is designed as an early intervention procedure for
businesses which find themselves in financial difficulties, while
still being at the stage when the company is not technically
insolvent and can be preserved as a going concern. As such,
preventive restructuring offers an alternative to more invasive
insolvency-driven procedures such as bankruptcy or formal
court-administered restructuring.
