News

February 2023 – Resolution of the Supreme Court of the Slovak Republic of 25 November 2020, Case No. 3 Obdo 31/2020 (Set-off agreement as a legal act favouring a creditor)

An agreement on the set-off of claims concluded between an insolvent party and its related creditor is also a legal act favouring the creditor as defined in Section 59 of the Bankruptcy and Restructuring Act. This is because, contrary to the principle of the proportional satisfaction of creditors, it extinguishes the claim of the related creditor by setting it off against a counterclaim of the insolvent party, the value of which would otherwise be used to satisfy the unsecured claims held by creditors of the insolvent party on a pro rata basis before the subordinated claim of the related creditor can be satisfied (Section 95(2) of the Bankruptcy and Restructuring).

Full article (Slovak) is available at this link.