SLOVENIA Law and Practice Contributed by: Vid Kobe and Peter Gorše, Schoenherr Slovenia
relevant convention and Slovenian arbitration and civil procedure rules. 6.4 A Foreign Lender’s Ability to Enforce Its Rights There are generally no specific restrictions and limita- tions that would impact a foreign lender’s ability to enforce its rights under a loan or security agreement exclusively due to the lender being a foreigner. For the sake of completeness, if a foreign lender were to acquire the underlying collateral (which is – despite the general restriction of collateral appropriation – possi- ble in certain structures and subject to certain limita- tions; see also 3.2 Restrictions on Foreign Lenders Receiving Security ), this may trigger a requirement to obtain certain regulatory approvals, in particular an approval of a foreign direct investment. In addition, certain limitations (most notably a condition of reci- procity – see also 8.4 Foreign Ownership ) may apply where a foreign lender intends to acquire a real estate property in Slovenia. The Slovenian insolvency regime, governed by the Slovenian Financial Operations, Insolvency Pro- ceedings and Compulsory Dissolution Act ( Zakon o finančnem poslovanju, postopkih zaradi insolventnosti in prisilnem prenehanju (ZFPPIPP)), provides for two basic forms of insolvency proceedings: • the compulsory settlement (CS)/insolvent reorgani- sation process ( postopek prisilne poravnave ); and • bankruptcy/insolvent liquidation proceedings ( stečajni postopek ). 7. Bankruptcy and Insolvency 7.1 Impact of Insolvency Processes In addition, ZFPPIPP provides for two general forms of “preventative restructuring” proceedings (see 7.4 Rescue or Reorganisation Procedures Other Than Insolvency ). CS Proceedings In general terms, the aim of CS proceedings is to ena- ble an insolvent corporate debtor to achieve long-term solvency by reaching an agreement with a requisite majority of its (affected) creditors. A duly opened CS
proceedings will result in (i) restrictions to the debtor’s operating activities (limited to ordinary course of busi- ness); and (ii) an automatic stay on court enforcement proceedings against the debtor. If approved by the requisite majority of the affected creditors, the CS will result in a “cram-down” over the rest (ie, the terms of the CS will also be imposed on the dissenting minority of affected creditors). The effects of opening CS proceedings on the credi- tors’ claims against the debtor commence on the day the competent court publicly notifies the creditors of the initiation of CS proceedings (“the call”); notably, these effects include the following. • A stay on court enforcement proceedings against the debtor is implemented (“execution holiday”). • Claims against the debtor having arisen prior to the opening of CS proceedings are subject to, inter alia, the following alterations: (a) non-monetary claims are converted into mon- etary claims (at market value); (b) periodic claims are transformed into singular claims; (c) foreign currency claims are transformed into euro claims; (d) set-off occurs ex lege for all eligible mutually reciprocal claims (despite not having fallen due); and (e) as regards (reciprocal) claims governed by qualified financial agreements containing close- out netting provisions, the CS will only affect the calculated net claim against the debtor. Generally, the effects described under the second bul- let point above do not extend to (i) secured claims (except in cases where CS proceedings are also aimed at extension to secured claims) or (ii) priority claims (see 7.2 Waterfall of Payments ). Moreover, mutually unfulfilled (executory) contracts and claims arising therefrom are not subject to the foregoing effects; however, the debtor may elect to terminate such contracts (subject to court approval) within one month from the opening of CS proceed- ings.
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