SLOVENIA Law and Practice Contributed by: Vid Kobe and Peter Gorše, Schoenherr Slovenia
Bankruptcy Proceedings Generally, the aim of bankruptcy proceedings is to enable a court-sponsored dissolution of an insolvent corporate debtor (liquidation of its assets), providing for optimal recovery terms for the debtor’s creditors (taking into account the general principle of equal treatment of (same-class) creditors). After the opening of bankruptcy proceedings, credi- tors’ claims against the debtor may generally only be exercised within bankruptcy proceedings and not by way of other/parallel proceedings – the so-called prin- ciple of concentration. However, the opening of bankruptcy proceedings does not affect the creditors’ (contractual) rights of out-of- court enforcement of security interests/collateral (ie, the asset securing the claim may be liquidated out of bankruptcy, and said claim may be repaid without having to be lodged (except for the potential part of the claim, uncovered by the proceeds realised through the monetisation of the asset providing security)). The effects of opening bankruptcy proceedings on creditors’ claims are broadly equivalent to those of CS proceedings (see the second bullet point in the foregoing); in addition, notably, the interest rate of mature interest-gathering claims is converted to the statutorily prescribed rate ( predpisana mera zamudnih obresti ) as of the opening of bankruptcy proceedings. 7.2 Waterfall of Payments Generally, in terms of priority of payments within insol- vency proceedings within the meaning of ZFPPIPP, claims of creditors may be classified as follows: • secured claims ( zavarovane terjatve ) – claims of creditors secured with a legally recognised security interest in a debtor’s asset (see also 5.1 Assets and Forms of Security ) will be repaid, as a matter of priority, from the proceeds of sale of the rel- evant collateral (in relation to competing security interests, see 5.7 Rules Governing the Priority of Competing Security Interests ); • priority unsecured claims ( prednostne nezavaro- vane terjatve ) – according to ZFPPIPP, certain claims – notably worker’s wages and damages for work-related accidents and illnesses, together with
associated social contributions – shall be settled (out of the proceeds from liquidation of the debtor’s assets that are not subject to (valid) security) ahead of other unsecured creditors; • ordinary unsecured claims ( navadne terjatve ) are settled out of the proceeds from liquidation of the debtor’s assets (not subject to valid security) after priority unsecured claims and subordinated claims; and • subordinated claims ( podrejene terjatve ) – accord- ing to ZFPPIPP, these are claims that, based on the legal relationship between the relevant creditor and the borrower, are to be settled only after repayment of all other unsecured claims of the borrower (see also 5.7 Rules Governing the Priority of Compet- ing Security Interests ). In addition to the foregoing, certain claims of credi- tors (notably, claims that arise after the opening of the relevant insolvency proceedings) shall, according to ZFPPIPP, be treated as “cost of proceedings” and repaid ahead of certain claims arising prior to such opening. 7.3 Length of Insolvency Process and Recoveries According to court system statistics (publicly available at the time of writing), the average duration of bank- ruptcy (insolvent liquidation) proceedings concluded in 2024 ranged between 18.4 months (in cases pend- ing before courts in Ljubljana) and 21.1 months (in cases pending before other Slovenian courts). On the other hand, CS (insolvent reorganisation) proceedings lasted on average 8.5 months in 2024. In practice, the duration of the respective proceedings may nota- bly deviate from the mean values – in particular as a function of the quantum of assets and multitude of stakeholders involved. As regards the rate of recovery, no official statistics are available in this respect; according to certain research (conducted in the recent past for academic purposes), the mean recovery rates in bankruptcy proceedings (relative to the nominal value of the creditor’s claims) have historically been: • in respect of bankruptcies where distribution to creditors took place (ie, where the debtor’s assets
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