The successor manager shall be liable for damage caused by failure to file or late filing of a petition for bankruptcy

The successor manager shall be liable for damage caused by failure to file or late filing of a petition for bankruptcy

Undoubtedly, one of the important changes in economic law is the introduction of the institution of a succession manager, i.e. a person who will temporarily manage the enterprise of a natural person after his or her death (“inheritance enterprise”). According to the Act of 5 July 2018 on succession management of a natural person’s enterprise, such a person is to perform conservative actions to enable the transfer of an efficiently functioning enterprise to the heirs of the deceased.

Changes introduced by the Act on Succession Management of an Individual’s Enterprise

Apart from a completely new regulation concerning the appointment of an administrator, his competencies or remuneration rules, the Act on succession management of a natural person’s enterprise introduces noteworthy changes in the bankruptcy law. In particular, on the basis of the introduced art. 21 (2a) of the Bankruptcy law, a succession manager has been classified by the legislator as an entity responsible for damage caused by failure to file or late filing of a petition for bankruptcy. The 30-day deadline for filing a petition runs from the moment of “establishment of succession management”. According to Article 33(2) of the Act on Succession Management of a natural person’s enterprise, the Succession Manager is liable for damage caused as a result of improper performance of duties.

BASIS FOR THE REQUEST BY THE SUCCESSION ADMINISTRATOR

The basis for submitting the application will be the loss of the ability to perform the mature pecuniary obligations with respect to activities carried out within the framework of running the enterprise inheritance (new Article 11a of the Bankruptcy law). The presumption related to a 3-month delay in payment (Article 11(1a) of the Bankruptcy law) will also apply accordingly. Additionally, the introduced changes extend the period during which the deceased entrepreneur may be declared bankrupt. In accordance with the existing provisions of Article 7 of the Bankruptcy law, such an application had to be submitted within one year from the date of the death of the entrepreneur. After the changes, this period will be extended until the date of expiry of the succession board.

CONSEQUENCES OF ACCEPTING THE DUTIES OF A SUCCESSION MANAGER

The regulations described above undoubtedly constitute a significant risk for future succession managers, many of them may not be aware of the obligations imposed on them and the consequences associated with them. Any natural person who has full legal capacity may be appointed a successor manager. Comprehensive awareness of the owners, as well as future heirs of family businesses, of all the consequences of taking on the duties of a succession manager, slowly avoiding any problems related to the performance of the above mentioned functions.

 

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