The Corona Crisis leads worldwide to critical situations for companies.
In light of this, Digitorney has asked lawyers from various countries specialized in restructuring law for recommendations on what needs to be done and which solutions are at hand to weather the Corona Crisis.
This part of our series focuses on the Czech Republic:
1) When does a Czech company need to file for insolvency?
Under Czech Act No. 182/2006, the Insolvency Act, as amended (the “Czech Insolvency Act”), a company is required to apply for insolvency without undue delay after they have learnt or with due diligence ought to have learnt about their insolvency. MORE
2) What liability risks exist for the management in the Czech Republic in a corporate crisis?
A statutory body of a company who fails to file an insolvency petition in conflict with the Czech Insolvency Act shall be liable to the creditors for the damage or other loss which they caused by the violation of such obligation. A late filing for insolvency can be connected with favouring creditors, which may constitute a criminal offence. MORE
3) Is there any state aid available for Czech companies due to the Corona crisis?
Since the moment of declaration of the State of Emergency by Czech Government on March 12, 2020, there have been a number of measures and laws, as well as state aid programs adopted in order to mitigate negative impacts of the corona crisis and those steps are being continuously reviewed. MORE
4) What immediate measures should a Czech company take if it is affected by the Corona crisis?
To comply with their obligation to act with due managerial care, members of statutory bodies are recommended to take quickly all necessary actions and implement remedial measures that may differ from company to company. MORE
Legal notice: All contents available in the Digitorney Lounge (e.g. templates, checklists, key questions) have been created with the greatest possible care and are constantly updated, but do not claim to be complete and correct. All contents are to be understood as suggestions that must always be adapted to the needs and specifics of the individual case. Digitorney Group B.V. as a provider of this website is not a legal advisor and therefore cannot assume any liability for the impact of the contents available in the Digitorney Lounge on the legal position of the user or the parties using it. Liability for slight negligence is also generally excluded. Further details can be found in our General Terms and Conditions, with which you agree by using the Digitorney Lounge. If you need a customized document, you should seek advice from a lawyer. You can send a search query to Digitorney here.