Deadline to register a claim acquired by assignment in insolvency

Deadline to register a claim acquired by assignment in insolvency

At the end of 2014, the Supreme Court issued a decision No. 29 NSČR 126/2014 dealing with the issue of claims acquired by a foreign creditor by assignment and with registration of such claims in insolvency proceedings.

The case related to an assignee with registered office in a member state of the EU who did not notify the debtor (insolvency trustee of the debtor) of the assignment before the lapse of the period set out by law to register claims in insolvency. The court dealt with two specific issues:
(a)    whether later (after the lapse of the registration period) notification by the creditor of the assignment relieved the trustee from the obligation to proceed towards such creditor in compliance with Section 430 of the Insolvency Act and Article 40 of Council Regulation (EC) No. 1346/2000 (information obligation to creditor); and
(b)    whether such later notification gives the creditor specific rights in terms of registration of its claim.

As far as (a) is concerned, the court confirmed the fact that the assignment (i.e. the existence of a new creditor) emerges after the expiry of the deadline to register claims does not relieve the trustee from its information obligation towards such a creditor.

On the other hand the court denied that such late notification of assignment gives the creditor any preferential rights and stressed out that missing the deadline for filing a claim is irreversible.

In view of the above, in the case a claim is assumed by a foreign assignee, we strongly recommend such assignee to (i) monitor the Czech Insolvency Register and (ii) notify/prove the assignment to the insolvency trustee without undue delay in order to preserve rights of the so called “known creditor”.