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Coronavirus - Lex COVID-19 amendments - Slovakia

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On 22 April 2020, Parliament approved an amendment to the
Lex COVID-19. In this package, Parliament approved the following measures:

Suspension of enforcement proceedings

The law allows enforcement proceedings to be suspended if the debtor is a natural person, up to six months after notification of the suspension of the enforcement proceedings, however no later than 1 December 2020.

The bailiff decides on the suspension at the request of the debtor. Such application shall include a declaration by the debtor that his temporary income decrease was caused by the emergency situation due to the spread of COVID-19 and that an immediate enforcement proceeding could have adverse consequences for him or his family members.

During the suspension of the enforcement proceedings, the bailiff may continue taking measures aimed at identifying and securing the property subject to enforcement proceedings.

Prohibition of lease agreements termination

Prohibition of unilateral termination of lease agreements for real estate, including renting an apartment or a non-residential space, by the landlord due to the tenant's delay in paying the rent, including payments for services usually related to the rental contract, that is due in the period from  1 April 2020 until 30 June 2020, if such delay has occurred due to circumstances caused by the spread of the dangerous infectious disease COVID-19. The prohibition is valid until 31 December 2020.

Other claims such as interest on arrears or any contractual penalties are not affected.

Extension of the ban on the exercise of liens, auctions, monetization of property and enforcement proceedings by sale of real estate

The ban on these legal transactions will be extended by another month; from the original period from 30 April 2020, the ban has been extended to 31 May 2020.

Temporary protection of companies

Temporary protection is only granted at the request of the company, which will be assessed by court.

Temporary protection lasts until 1 October 2020, unless the company has previously requested its termination or the court has decided on an earlier termination. The general duration of providing temporary protection may be extended by the Government of the Slovak Republic by a regulation until 31 December 2020.

The court may also decide on the revocation of temporary protection on the basis of a qualified petition of a third party.

Should the temporary protection be granted, it will have the following effects:

Bankruptcy protection

  • suspension of proceedings on creditor petitions for bankruptcy or bankruptcy proceedings opened on the creditor's petition, if no insolvency proceedings has yet been opened, provided the petitions were filed after 12 March 2020
  • for the duration of the temporary protection, the company is not obliged to file for bankruptcy on its property

Suspension of enforcement proceedings

Enforcement proceedings initiated after 12 March 2020 against company under temporary protection in order to satisfy a claim arising from its business activities shall be suspended for the duration of the temporary protection.

Prohibition of the lien exercise

The exercise of the lien on an enterprise, thing, right or other property value belonging to the company may not be commenced against the company under temporary protection.

Prohibition of related claims offsetting

A claim which arose against the company under temporary protection after the provision of temporary protection cannot be offset against a claim which arose against the company under temporary protection before the provision of temporary protection if it is a claim which belongs or belonged to a person related to it.

Prohibition of withdrawal from or termination of the agreement

After granting temporary protection, the other party may not terminate the agreement, withdraw from the agreement or refuse performance under the agreement for the delay of the company under temporary protection, which was enforced on 12 March 2020as a result of COVID-19.

Time limits do not expire

Time limits for exercising the right against a company under temporary protection (e.g. limitation period), including time limits for claims from contestable legal acts, do not run during the duration of temporary protection.

Prohibition of profit distribution

A company may not distribute profits or other owned resources, and is to refrain from disposing its company's assets that may belong to it, provided it could result in significant changes in the composition, use or purpose of these assets or in its not-negligible reduction.

Preferential payment of liabilities

The entrepreneur under temporary protection is entitled, only for the duration of the temporary protection, to pay the liabilities which are directly related to the maintenance of the enterprise arising after the granting of temporary protection, in preference to previously due liabilities.

Exceptions for related creditors

Loans and similar services that are economically equivalent to a loan provided to a company under temporary protection by a related party pursuant to the Bankruptcy Proceedings Code,
in a non-cash form for the duration of temporary protection and directly related to the maintenance of the enterprise; are not assessed under the provisions of the Commercial Code on crisis and not subject to the provision of bankruptcy proceedings regulation on their satisfaction in a subordinate order.