HUNGARY Law and Practice Contributed by: Szabolcs Mestyán, John Fenemore, Balázs Rokob and Nóra Kertai, Lakatos, Köves & Partners
2.8.14 Practical Issues Related to Deregistration of Aircraft According to the practice of the CAA, any mortgage over the aircraft should be removed before a dereg - istration of the aircraft can take place. Therefore, the release of the relevant mortgage over an aircraft with the involvement of the mortgagee should be arranged for prior to requesting the deregistration of the aircraft. 2.9 Insolvency Proceedings 2.9.1 Overview of Relevant Laws and Statutory Regimes Governing Restructurings, Reorganisations, Insolvencies and Liquidations The primary laws and regulations relevant to Hungar - ian lessees are as follows: • Act XLIX of 1991 on Bankruptcy Proceedings and Liquidation Proceedings (the “Insolvency Act”), regulating the two main insolvency regimes, ie, bankruptcy proceedings and liquidation proceed - ings; • EU Insolvency Regulation No 2015/848 (the “EU Insolvency Regulation”), addressing conflicts of law in relation to insolvency proceedings (directly applicable); • Act XCIX of 2021 (the “State of Emergency Act”), providing an emergency and temporary pre-insol - vency regime; and • Act LXIV of 2021 on Restructuring and the Amend - ment of Certain Laws for the Purposes of Harmo - nisation (the “Restructuring Law”), implementing key sections of Directive 2019/1023 on preventive restructuring frameworks on discharge of debt, disqualifications and measures. 2.9.2 Overview of Relevant Types of Voluntary and Involuntary Restructurings, Reorganisations, Insolvencies and Receivership Relevant types of procedures under Hungarian juris -
debts of the debtor become payable and due at the start of the liquidation proceedings. The procedure may be started by the debtor com - pany or the creditors only on the basis of inability to pay. Courts are responsible for the appointment of the liquidator. Specific transactions listed under the Insolvency Act may be challenged by any creditors of the debtor or the liquidator within a one-year time period starting from the court order regarding com - mencement of the proceedings. Bankruptcy Proceedings The purpose of bankruptcy proceedings is to help distressed companies continue their business opera - tions by reaching a composition agreement with credi - tors of the distressed company under a formalised procedure, also involving the court and a bankruptcy trustee. The bankruptcy proceedings provide a mora - torium period to the debtor, during which creditors’ rights are restricted. The procedure may be started by the company. Bank - ruptcy proceedings are rarely successful and the pro - ceedings often become liquidation proceedings. Reorganisation Proceedings A new pre-insolvency procedure was introduced in April 2021 to mitigate debtors’ distressed positions during COVID-19. Similar to bankruptcy proceed - ings, its purpose is to help restructure debts of the distressed company by implementing a restructuring plan. The procedure may be started by the distressed company. Restructuring Proceedings Similar to bankruptcy and reorganisation proceed - ings, the main purpose of the restructuring proceed - ings is, inter alia, to allow a debtor in financial dis - tress, but not yet insolvent, to adopt and implement a restructuring plan in co-operation with some or all of its creditors to avoid insolvency and to ensure its viability. The debtor may decide on the restructuring at its sole discretion (provided that there are no grounds for exclusion, such as pending reorganisation, bank - ruptcy or liquidation proceedings). The debtor may also determine, at its sole discretion, which claims and/or creditors it wishes to include in the restructur -
diction are the following. Liquidation Proceedings
Liquidation proceedings aim to satisfy creditors of a debtor company in the order determined by law by liquidating the assets of the debtor company and dis - tributing them among the debtor company’s creditors, following which the debtor company is dissolved. All
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