Amendments to the Companies Act and Bankruptcy Act during the emergency situation

Pursuant to the Government Decree, published in the Hungarian Official Gazette on 28 May 2020 (Government Decree No. 249/2020 (V.28.) on the Deviations in the Application of Act XLIX of 1991 on the Bankruptcy and Liquidation Proceeding (hereinafter referred to as the Bankruptcy Act) and Act V of 2006 on Public Company Information, Company Registration and Winding-up Proceedings (hereinafter referred to as the Companies Act) for the Implementation of the Economy Protection Action Plan [hereinafter referred to as the Decree]), the Bankruptcy Act is amended as of 29 May 2020 as follows:

The creditor may file a petition for the debtor’s liquidation during the term of the emergency period, if

  1. the debtor fails to settle or contest his previously uncontested and acknowledged contractual debts within 20 (twenty) days of the due date, and fails to satisfy such debt within 75 (seventy-five) days of the deadline set in the creditor’s written payment notice. In this case, upon the request of the debtor, the court may allow maximum 15 (fifteen) additional days to satisfy the debt (instead of the previous 45 days extra deadline);
  2. the amount of the debt (less the interest and similar charges) exceeds HUF 400,000 (instead of the minimum amount of HUF 200,000 defined in the Bankruptcy Act).

Pursuant to the Decree, the Companies Act is amended as of 29 May 2020 as follows:

  1. The court may not declare the company terminated in a judicial oversight proceeding.
  2. The proceedings initiated by the national tax and customs authority for the termination of the company due to the invalidation of the company’s tax number, as well as the involuntary de-registration proceedings that are ongoing on the date of the Decree, are suspended until 31 October 2020.
  3. No proceeding for the involuntary de-registration of a company may be initiated on the grounds of the company’s failure to finish the winding-up proceeding and submit the request for de-registration. In such a case, the concerned company has an additional deadline until 31 October 2020 to submit such a request for de-registration.

The Decree is not applicable to involuntary de-registration proceedings initiated on the grounds of the company’s termination without legal succession.