Czech President signed a major amendment of the Insolvency Act (No. 182/2006 Coll.) into law, whose primary aim is to limit attempts at filing groundless motions, where the actual insolvency of the debtor is not the main objective, rather than efforts to obtain payment on money owed to the insolvency claimant by using threat of insolvency as leverage.
Insolvency proceedings may prove fatal even for a healthy company, regardless of the fact that a publication of commenced insolvency proceedings does not actually indicate that the company is indeed insolvent. The new amendment makes it, for instance, possible to impose an obligation on the claimant / creditor to deposit a collateral against potential damage, which could arise to the debtor by a groundless motion or measures adopted during the proceedings. This step increases liability of the claimant / creditor for the outcome of the proceedings in situations where the insolvency motion seeks leverage of the dispute over money owed from court to insolvency proceedings. The same objective may be achieved by an entirely new instrument, which is rejection of the insolvency motion for its apparent lack of any justification, a process that should be completed only within 7 days from its filing.