HUNGARY Law and Practice Contributed by: John Fenemore, Szabolcs Mestyán, Adrienn Mándoki and Nóra Kertai, Lakatos, Köves & Partners
4.3 The End of the Restructuring, Rehabilitation and Reorganisation Procedure In case a bankruptcy, 2021 Reorganisation Proceed - ings or preventive restructuring ( szerkezetátalakítás ) successfully ends in the conclusion of a relevant com - position, there is no requirement that such arrange - ment reflects the priority of claims that would other - wise prevail in the case of an insolvent liquidation. The relevant stakeholders are generally free to agree on the implementation of the 2021 Reorganisation Pro - ceedings or restructuring. In terms of preventive restructuring ( szerkezetáta- lakítás ), the restructuring plan will be approved by a majority of the creditors and will be approved by the court if it meets all legal requirements. In this case, the majority of the creditors means: • the majority of creditors in the majority of creditor classes; and • the majority of the creditors within the classes in relation to the total number of votes that can be obtained. However, upon the debtor’s or the relevant creditor’s request (with the approval of the debtor), the court may approve the restructuring plan with compulsory composition effect for all classes. In bankruptcy proceedings, the composition is accepted if the majority of both secured and unse - cured creditors vote in favour. The accepted compo - sition also extends to those creditors eligible to par - ticipate in the settlement who did not agree to it or, despite being properly notified, did not take part in the settlement process. If the competent court approves the composition the bankruptcy proceeding is ended. Otherwise, if the composition was not settled or does not comply with legal requirements, the court terminates the bank - ruptcy proceedings and determines the insolvency of the company ex officio (see 5.1 The Different Types of Liquidation Procedure ).
creditors in the same class or to creditors that are affiliates of the debtor; and • in preventive restructuring ( szerkezetátalakítás ) proceedings, either: (a) the majority of creditors in the majority of credi - tor classes (including the secured creditor class and/or the business-related creditor class) voted in the affirmative; or (b) the majority of creditors (also representing the majority of votes within the relevant class) in at least one of the creditor classes voted in the affirmative, provided that affected creditors in such class could reasonably be expected to receive proceeds in case of an insolvent liquidation of the debtor. In each case, the restructuring plan must ensure that dissenting creditors enjoy: (i) the same treatment in terms of recovery rate and other aspects as consenting creditors in the same class; and (ii) more favourable treatment than creditors in the subordinated class. Registration of Claims In both bankruptcy and preventive restructuring ( sze- rkezetátalakítás ) proceedings, claims of creditors will be valued and registered. Objections may be filed by the respective creditors against the assessment, but ultimately these are not binding if the stakeholders fail to agree on a composition. New Money The rules on bankruptcy generally do not contemplate the injection of new money, but in principle it is possi - ble to arrange (including the granting of new security) to the extent approved by the bankruptcy trustee and the majority of the relevant creditors. The framework of preventive restructuring ( szerkeze- tátalakítás ) encourages stakeholders to procure inter - im and/or new financing by granting certain special procedural protections under some conditions. In par - ticular, the right to challenge such financing in sub - sequent insolvency proceedings is widely excluded.
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