bankruptcy proceeding is its effectiveness and duration. The acute problems in practice are improvement and effectiveness of the bankruptcy proceeding as well as requests to reduce its costs. The goal is to eliminate legal problems that slow the bankruptcy process by implementing new solutions that will ensure the conditions for achieving the efficiency of bankruptcy proceed- ings, while preserving legal certainty and the rule of law.
How do stays work in the case of bankruptcy? Stays on payments of bankrupt companies to cred- itors are automatic. Payments to creditors may begin only after the general examination hearing has been held. Payments are made as cash enters the estate. Creditors of lower priority are not par- ticipating in partial distributions. Distributions are made by a bankruptcy trustee, having obtained prior consent from the creditors’ committee, if established, or the bankruptcy judge.
Can you give an overview of creditors’ priorities and rights in Croatian bankruptcy proceedings? Secured creditors tend to have payment priority but just on secured property. According to their claims, the creditors are classified into priorities (ranks), as follows.
2013, when Croatia is scheduled to become an EU member state, the number of cross-border cases requesting cooperation will rise
“ significantly ”
From July
Claims of higher priority, which are: 1. Claims consisting of employees’ salaries
(earned until bankruptcy), severance pay ascer- tained by law, and compensation of damages due from work injuries or professional illness 2. All other claims against a debtor, except
those specifically classified in lower priorities Claims of lower priority, which are: 1. Interests on bankruptcy creditors’ claims
starting from the day of bankruptcy proceedings opening 2. Costs incurred by creditors in bankruptcy
proceedings 3. Monetary fines for criminal acts or misde-
meanours as well as related costs 4. Claims demanding a free performance by a
debtor 5. Claims for loan repayment, where such loan
was given by a debtor’s shareholder and used for substituting debtor’s share capital, or similar claims Voting rights are granted to creditors that have
reported their claims and where such claims have been recognised by the bankruptcy trustee. Creditors with their claims challenged might
have a voting right, but only if they have obtained the consent of both the bankruptcy trustee and the other creditors to exercising their right.
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