Revocation of the decision declaring the debtor’s bankruptcy and the consequences of opening the proceedings

Revocation of the decision declaring the debtor’s bankruptcy and the consequences of opening the proceedings

The decision on declaring the debtor’s bankruptcy is undoubtedly a special provision in terms of the scope of its effects on the debtor’s legal situation. First of all, it is effective and enforceable on the date of its issuance, which means that its possible appeal does not suspend the actions of the trustee in order to liquidate the assets and satisfy the creditors. As indicated in the literature (S. Gurgul), in the interwar period, in the context of the bankruptcy ordinance, there were doubts as to the effects of issuing by the second instance court a decision to quash the bankruptcy decision and to remit the case for reconsideration. In particular, it was questionable whether the receiver should then hand over (return) the assets to the bankrupt for the duration of the bankruptcy proceedings.

In order to remedy such doubts, the above-mentioned issue was regulated in Art. 54 sec. 3 BRL According to it, if the bankruptcy decision is revoked and the case is remitted, the receiver and the judge-commissioner retain their powers, and the actions performed by them remain in force. This issue was also the subject of the resolution of the Supreme Court of 27 January 2006, III CZP 126/05, in which it was stated that “The decision to quash the bankruptcy decision and remit the case for reconsideration does not reverse the bankruptcy proceedings.”

In art. 54 sec. 4 BRL On the other hand, the situation was regulated when, during the re-examination of the bankruptcy petition (after a cassation judgment of the second instance court), the bankruptcy proceedings will be discontinued, and therefore the proceedings on the bankruptcy petition will be terminated by a decision that is not of a substantive nature.

These two regulations show that, despite the revocation of the bankruptcy decision and the referral of the case for reconsideration, the bankruptcy proceedings (initiated on the basis of the later contested bankruptcy decision) are still being continued. The effect of revoking the “proper” bankruptcy proceedings occurs only when the bankruptcy petition is finally considered (the petition will be legally rejected, rejected or the bankruptcy proceedings will be discontinued). It is precisely about the annulment of bankruptcy proceedings in such a case that Art. 371 p.u.

The possible effects or the lack of effects of a decision declaring bankruptcy, in a situation where the “proper” bankruptcy proceedings have been subsequently annulled (as a result of the final discontinuation of the bankruptcy proceedings, dismissal of the application or its rejection), must be resolved on the basis of the impact of the decision referred to in Art. 371 BRL, on the “effects” of bankruptcy proceedings. This issue is directly regulated in Art. 372 of the BRL, according to which changes in legal relations made in the course of bankruptcy proceedings are binding on the bankrupt and the other party also after the cancellation, termination or annulment of the bankruptcy proceedings, except for the explicit exceptions indicated. Among these exceptions, it was indicated, inter alia, that if the bankruptcy proceedings were set aside:

  • the bankrupt may withdraw the termination of contracts made by the receiver, if the notice period has not expired;
  • the bankrupt may, within thirty days from the date of announcement or delivery of the order which has been repealed, withdraw from the contracts concluded by the receiver, if the contract concluded by him was not performed or was partially performed.

The other bankruptcy effects therefore remain in force. In particular, it should be recognized that the effects related to the expiry of certain contracts by operation of law remain in force (Articles 102-105 of the BRL). If the law recognizes the effectiveness of such far-reaching actions as liquidation of assets or the conclusion of specific contracts, the more effective should be the expiry of certain contracts under the law itself, e.g. contract of mandate, commission contract, agency contract. The rule is to maintain the effects of bankruptcy proceedings, also after their annulment or discontinuation.

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