Incident disputes (in insolvency proceedings)
Incident disputes are litigation brought about by insolvency proceedings. The fundamental purpose of insolvency proceedings is to satisfy fairly the interests of all parties involved. On the one hand stand creditors who claim repayment of debts, on the other side stand the debtor and other persons after whom the issuance of property is demanded to satisfy those creditors.
Insolvency proceedings are a complex discipline, and procedural actions of the court often have irreversible consequences. Within this complex process, the need often arises to solve specific issues, which for their detail are dealt with outside the main branch of insolvency proceedings, where so-called insolvency litigation in insolvency proceedings also arise. In particular, the following insolvency disputes are known under the Insolvency Act
· disputes concerning the nullity of acts or the ineffectiveness of acts (counterclaims),
· Disputes concerning the authenticity, amount or order of claims lodged (counterclaims),
·Disputes concerning the exclusion of assets or property values from the estate (extinction proceedings),
· an action for the recoveryof a pecuniary benefit derived from the performance of the duties of a memberof the statutory body who contributed to the bankruptcy of the corporation(action to supplement liabilities).
For incidental disputes, similar rules apply to other civil disputes, with some peculiarities:
· Incidental disputes are heard by regional courts, often directly by a judge appointed to hear the main branch of insolvency proceedings;
· the insolvency administrator (often represented by a lawyer) conducts the insolvency proceedings on behalf of the debtor;
· The insolvency administrator may also enter into a settlement. Unlike the normal procedure, the settlement must also be approved by the Creditors' Committee, which is the body representing the interests of creditors;
· Incidental disputes also usually have a different amount of the court fee that must be paid for the initiation of a dispute or the filing of an appeal.
Current cases
In the area of incidental disputes, we are currently dealing with the situation of (former) clients of Energetický holding Malina a.s. (insolvency proceedings sp. zn. MSPH 79 INS 7166/2023).
The insolvency administrator, Insolvenční agentura v.o.s., contends in the opposing actions that Malina unlawfully returned to some clients the advances already paid, thereby favouring these former clients over other creditors. Accordingly, the opposing action seeks the release of these advances into the property.
In our view, the claim is not nearly as straightforward as it might seem, as we describe in more detail in our topicality
If you are dealing with a similar problem, do not hesitate to contact us. We will consult your case with you free of charge and outline effective defense options.