European Restructuring Monitor (ERM)
Eurofound's ERM database on restructuring-related legal regulations provides information on regulations in the Member States of the European Union and Norway which are explicitly or implicitly linked to anticipating and managing change.
Act 5/2006 Articles 55-56, 62-63, 69, 84, 92, 94-118,129; Act 49/1991 Articles 6, 7, 8, 9, 25, 26, 27, 40, 57, 65 Act 64/2021 whole law Act 99/2021 Articles 48-82
In 2021, Act 64 of 2021 on restructuring was enacted in order to harmonise with EU law. A company can also apply for bankruptcy or liquidation under Act 49/1991 with provisions in the law for voluntary reorganisation. A company facing financial difficulties might apply for voluntary reorganisation. The reorganisation agreement must include the following (Act 49/1991, Articles 19-21):
If the court, taking into account the creditors' claims, agrees with the reorganisation plan, the company can continue its preparations under the supervision of an appointed administrator. The creditors do not have a say in this decision. Employees must be notified and the announcement published in the Official Companies' Gazette (Cégközlöny). If the voluntary reorganisation plan is not concluded within 120 days from the date of this publication, the court proceeds with the regular bankruptcy proceedings.
Under a change from August 2020 in Act 49/1991, Article 84/A (1)b-c, the state is authorised to practice pre-emption rights in the purchase of companies it recognises as strategically important.
Under changes from December 2021 on temporary rules in the state of danger (the legal status introduced first due to COVID-19 then extended due to the war in Ukraine), exemptions on participation in reorganisation have been set, including insurers, investment and other types of financial service providers (Article 48). Further exemptions are listed in Article 50, which concern undergoing liquidation or bankruptcy procedures and other detailed rules of exemption. An expert on reorganisation must be appointed with many responsibilities during the procedure (Articles 51-53, 55-61, 63-65, 67, 69-70)
The number of bankruptcy cases filed in Hungary has been falling steadily from 190 in 2010, to 50 in 2016 and 15 in 2018. Researchers suggest procedures should be simplified and more assistance from the bankruptcy officer should be provided to improve the situation (Barta, 2018). The number of bankruptcy cases went up slightly to 22 in 2019, stayed at 22 in 2021, rose to 30 in 2022, according to court records cited by penzcentrum.hu.
The Hungarian Insolvency register contains data on insolvency proceedings initiated after 26 June 2018. Under current legislation, bulk data access is not permitted. However, users can search the register by entering a name, registration or civil registration number, or case number.
Hungary's "state of danger due to armed conflict in a neighbouring country" was put into effect on 24 February 2022 to last until 31 May 2022. There have been regular extensions to date and there is no official announcement on when the status would end.
The state of danger allows the government to rule by decree, it can suspend or deviate from laws by issuing a decree due to special circumstances and issue emergency legislation.
Eurofound (2016), Hungary: Rescue procedures in insolvency, Restructuring legislation database, Dublin, https://apps.eurofound.europa.eu/legislationdb/rescue-procedures-in-insolvency/hungary
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