Under Hungarian law, there is no such obligation for the companies to commence insolvency proceedings. Companies may initiate bankruptcy or liquidation proceedings voluntarily. It is possible to open a liquidation proceeding if the company is unable or unwilling to enter into bankruptcy. The petition for liquidation shall be submitted in possession of the prior consent of the management.
To commence liquidation proceeding, the debtor is required to be insolvent. The debtor meets the insolvency test:
- upon the debtor’s failure to settle or contest his or her previously uncontested or acknowledged contractual debts within 20 days of the due date, and failure to satisfy such debt upon receipt of the creditor’s written payment notice;
- upon the debtor’s failure to settle his or her debt within the deadline specified in a final court decision or order for payment;
- if the enforcement procedure against the debtor was unsuccessful;
- if the debtor did not fulfil his or her payment obligation as stipulated in the composition agreement concluded in bankruptcy or liquidation proceedings;
- if it has declared the previous bankruptcy proceedings terminated; or
- if the debtor’s liabilities in proceedings initiated by the debtor or by the receiver exceed the debtor’s assets, or the debtor was unable and presumably will not be able to settle its debt on the date when they are due, and in proceedings opened by the receiver, the members of the debtor economic operator fail to provide a statement of commitment, following due notice, to guarantee the funds necessary to cover such debts when due.
Hungarian law does not yet provide exceptions under the current situation in relation to bankruptcy and liquidation proceedings.