Insolvency 2025

HUNGARY Law and Practice Contributed by: John Fenemore, Szabolcs Mestyán, Adrienn Mándoki and Nóra Kertai, Lakatos, Köves & Partners

8. Setting Aside or Annulling a Transaction 8.1 Circumstances for Setting Aside a Transaction or Transfer If a debtor becomes the subject of an insolvent liq - uidation, any creditor or the liquidator has the right to challenge transactions concluded by the insolvent company that are of a type falling under any of the below categories. A challenge may be submitted within one year from the date of publication of the court order on the commencement of the liquidation proceedings. The types of transactions open to challenge are the following. • Contracts concluded or legal declarations made by the insolvent company within five years of the date preceding the date when a competent court received a petition for the initiation of liquidation proceedings or at any time thereafter, if such con - tract or legal declaration resulted in the decrease in the value of the insolvent company’s assets and the intent of the insolvent company was to defraud any or all of the creditors, and the contracting party or beneficiary of the legal declaration had or should have had knowledge of such intent. • Contracts concluded or legal declarations made by the insolvent company within two years of the date preceding the date when a competent court received a petition for the initiation of liquidation proceedings or at any time thereafter, if the subject matter of such contract or legal declaration is: (a) an asset transfer by the insolvent company for no consideration; (b) an undertaking by the insolvent company in respect of its assets for no consideration; or (c) an arrangement resulting in evidently dispro - portional benefit in value to the contracting party. • Contracts concluded or legal declarations made by the insolvent company within 90 days of the date preceding the date when a competent court received a petition for the initiation of liquidation proceedings or at any time thereafter, if the subject matter of such contract or legal declaration is to grant preference to any one creditor, in particular

• if, due to this conduct, the total assets of the com - pany have decreased or the claims of the creditors of the company cannot otherwise be met. In addition, if an insolvent liquidation proceeding is commenced, directors may face a fine of up to 50% of their annual salary if they do not co-operate with the liquidator of the company. Criminal law liability can be established if the directors commit fraudulent acts, such as hiding or damaging the assets of the company, acknowledging disputed claims or voluntarily decreasing the assets of the com - pany, and as a consequence the claims of the credi - tors of the company cannot be satisfied. The directors may be exempt from liability if they can prove that after the occurrence of an impending insol - vency, they did not undertake any business risks that were unreasonable in relation to the debtor’s financial situation and that they took all appropriate measures expected in the given situation to avoid or minimise creditor losses. “Shadow directors” may also be held liable. A shadow director is an individual or legal entity that had domi - nant influence over the conduct of the company. According to case law, the following persons may typically qualify as shadow directors: • majority or even minority shareholders of the com - pany; and • any de facto (unregistered) director of the com - pany. 7.3 Duties and Personal Liability of Officers Generally, laws applicable to various pre-insolvency, restructuring and insolvency proceedings require members of the supervisory board or other members of the debtor to co-operate with the relevant statutory officers. 7.4 Other Consequences for Directors and Officers See 7.2 Personal Liability of Directors .

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