HUNGARY Law and Practice Contributed by: Szabolcs Mestyán, John Fenemore, Balázs Rokob and Nóra Kertai, Lakatos, Köves & Partners
Restructuring Proceedings In restructuring proceedings, court will, at the request of the debtor, order a moratorium for the period speci - fied in the request, but for a maximum of four months (which may be extended up to a total maximum of 12 months). The moratorium is effective from the date of receipt of the order imposing the moratorium. 2.9.8 Liquidation of Domestic Lessees See 2.9.2 Overview of Relevant Types of Voluntary and Involuntary Restructurings, Reorganisations, Insolvencies and Receivership for methods applica - ble in Hungary. In addition, please note that if a Hungarian company is solvent, it may still decide on its winding-up (solvent liquidation) procedure. Simultaneously with the decision on the commence - ment of the winding-up procedure, a liquidator should be nominated who shall fulfil the obligations of the executive officers. If the company cannot settle all of its debts, the winding-up procedure turns into liquida - tion proceedings. 2.9.9 Ipso Facto Defaults Ipso facto defaults (specifically in the case of reorgani - sation) may not be recognised in certain cases under Hungarian law. See 2.9.5 Other Effects of a Lessee’s Insolvency . 2.9.10 Impact of Domestic Lessees’ Winding-Up See 2.9.5 Other Effects of a Lessee’s Insolvency for how domestic lessees’ winding-up would impact the aircraft and lease rentals. Applicable laws provide an exception from the stay on enforcement for financial collateral: if the early termi - nation amount is secured by monies and/or securities subject to a Hungarian law security deposit created prior to the initiation of the insolvency proceedings, the beneficiaries may satisfy their claims directly from the deposits within three months of the commence - ment of the insolvency proceedings. Upon expiry of the deadline, security deposits will also be enforced by the liquidator.
Any maintenance reserves would probably be similarly classified as lease rentals under the waterfall of credi - tors’ claims. See 2.9.5 Other Effects of a Lessee’s Insolvency . 2.10 Cape Town Convention and Others 2.10.1 Conventions in Force The Convention on International Interests in Mobile Equipment and the related Protocol on Matters Spe - cific to Aircraft Equipment are not in force in Hungary. 2.10.2 Declarations Made Concerning Conventions This is not applicable in Hungary. 2.10.3 Application of Article XIII of the Protocol on Matters Specific to Aircraft Equipment This is not applicable in Hungary. 2.10.4 Enforcement of Conventions This is not applicable in Hungary. 2.10.5 Other Conventions Hungary has ratified the Geneva Convention and the Rome Convention. 3. Aircraft Debt Finance 3.1 Structuring 3.1.1 Restrictions on Lending and Borrowing Lending (which also includes the arrangement, man - agement of loans, the collection of debt and taking security interests) is a licensable activity under Hun - garian law. Accordingly, financiers need to ensure that they possess adequate permissions, ie, they: • are licensed in Hungary; • have a licensed branch in Hungary; or • are seated in a member state of the EU or the OECD and possess a lending licence which could be passported into Hungary. There are no specific restrictions on borrowers in con - nection with the utilisation of loan proceeds other than rules applicable to the utilisation of monies generally.
245 CHAMBERS.COM
Powered by FlippingBook