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 Hungary:
1) When does a company need to file for insolvency in Hungary?
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. MORE
2) What liability risks exist for the management in Hungary in a corporate crisis?
There is a general rule on the liability of management in case of the companies’ dissolution without success. This means that, if the management fails to take the creditors’ interest into account after insolvency takes place, the management shall be liable for damages up to claims outstanding on the ground of non-contractual liability. MORE
3) Is there any state aid available for companies in Hungary due to the Corona crisis?
The Hungarian Government has announced the economy protection action plan in April 2020. The action plan is under revision now, in the following, we summarise the main points of the economy protection action plan as of 20 April 2020: MORE
4) What immediate measures should a Hungarian company take if it is affected by the Corona crisis?
The Hungarian government recently introduced facilitation measures in the field of company law to provide a more convenient way for companies in the decision-making process. For example, a decision-making body might hold its meeting by electronic communication means or adopt resolutions without holding meetings. In addition to this, the acceptance of the company’s report can be carried out by electronic communication means or other electronic means suitable for identification. 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.
