Slovak Financial Law News 2005

Assets Subject to Bankruptcy

In order to satisfy the bankrupt's creditors from the bankrupt's estate, the Act governs classification of the assets into so-called ``general estate'' (assets subject to bankruptcy which do not belong to any of the separate estates, i.e. assets from which unsecured receivables of the creditors are satisfied) or so-called ``separate estate'' of the lien creditor (assets, belonging to the bankrupt or a third party, from which the creditor's receivable secured by a lien is satisfied). An individual separate estate is created for each secured receivable of the bankruptcy creditor. Under the Act, if the receivable of the lien creditor is secured by a lien relating to the business, a separate estate of the lien creditor consists of items, rights and other asset values pertaining to the business, as well as proceeds of encashment of these items, rights and other asset values if they are not part of the separate estate of another lien creditor.

The Act regulates other powers of creditors and creditors' committee related to the administration of the assets subject to bankruptcy. A method of dividing ``receivables against the estate'' among the particular bankrupt's estates is regulated in more detail.