In the recent ILO newsletter Alexander Isola and Fran Gebauer analysed the impact of restructuring plans on non-participating creditors.
Section 156 (1) of the Insolvency Act confirms that once a restructuring plan has been confirmed, the debtor is discharged from its debt and subsequently no longer needs to pay its creditors their deficiency or repay other granted benefits. In effect any claims that were not registered during the insolvency proceedings cannot be repaid. However, under Section 156(4)(IA) of the act, if a creditor’s claim is not included in the restructuring plan due to a fault of the debtor, the creditor may request payment of the full claim amount, even after the insolvency has been completed.
The Supreme Court recently confirmed these standards and ruled that if the facts show that a creditor had sufficient knowledge of insolvency proceedings or an insolvency claim and still did not register the claim, it will be considered to be at fault, and the creditor will be unable to enforce its claim against the (newly restructured) debtor.
ILO-Newsletter, dd. 5 April 2019
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