HUNGARY Law and Practice Contributed by: John Fenemore, Szabolcs Mestyán, Adrienn Mándoki and Nóra Kertai, Lakatos, Köves & Partners
2. Creditors 2.1 Types of Creditors
which have priority in respect of the proceeds of liq - uidation over secured and unsecured claims. In the context of bankruptcy, preventive restructuring ( szerkezetátalakítás ) proceedings and the 2021 Reor - ganisation Proceedings, claims are generally subject to statutory moratorium. However, there are certain privileged claims that are exempt from the effects of the moratorium – eg, in certain cases claims arising from the supply of goods and/or services necessary for the continuation of the business (to the extent the purchase of the same was approved by the insolvency practitioner), certain taxes and other public debt. Where a bankruptcy, preventive restructuring ( sze- rkezetátalakítás ) or the 2021 Reorganisation Pro - ceedings successfully ends in the conclusion of a rel - evant composition, there is no requirement that such arrangement reflects the priority of claims that would otherwise prevail in an insolvent liquidation. The rel - evant stakeholders are generally free to agree on the implementation of the 2021 Reorganisation Proceed - ings or restructuring. 2.3 Secured Creditors Creditors may secure their claims by various forms of security interests. They may establish pledges, mortgages, liens or deposits or they may secure their assets by way of security assignment or call option for collateral purposes, etc. Pledges may be enforced, subject to the applicable laws and subject to the terms of the underlying agree - ments, by way of: • court enforcement proceedings; • simplified court enforcement procedure; • sale of the relevant asset either by way of public or private sale; • acquisition of the relevant asset; or • in any other way provided in the underlying agree - ments. Security deposits over cash or securities may be directly enforced by secured creditors within a lim - ited time period. Direct enforceability means that the cash or securities over which deposits were estab -
Creditors are assigned to various classes in liquida - tion, bankruptcy and preventive restructuring ( sze- rkezetátalakítás ) proceedings depending on, as the case may be, the type of claim they have or whether they are secured or not. Secured and unsecured creditors are usually treated separately in terms of key decision-making, and the approval of a certain proportion of both groups is required for a successful composition. Creditors are put into separate classes (voting sepa - rately) in both bankruptcy and preventive restructuring ( szerkezetátalakítás ) proceedings as follows. • In case of bankruptcy – secured and unsecured creditors. • In case of preventive restructuring ( szerkezetáta- lakítás ): (a) secured creditors; (b) business-related creditors (ie, creditors that are supplying goods and/or services that are essential for the business of the debtor or the preventive restructuring ( szerkezetátalakítás ) and unsecured interim or new financing credi - tors); (c) subordinated creditors (eg, creditors that are affiliated with the debtor or whose claims are arising from gratuitous transactions); and (d) other creditors. Secured creditors enjoy preferential ranking in insol - vent liquidation (see 4.6 The Position of Shareholders and Creditors in Restructuring, Rehabilitation and Reorganisation and 5.4 The Position of Shareholders and Creditors in Liquidation ). 2.2 Priority Claims in Restructuring and Insolvency Proceedings There are priority claims in insolvent liquidation pro - ceedings. These include the costs and fees arising in connection with the liquidation, employees’ salaries and similar payments, maintenance allowances and similar payments; damages and similar payments; taxes and similar payments and other public debt,
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