The Supreme Court on abusive (vexautious) insolvency petitions

The Supreme Court of the Czech Republic decided to respond to what seems to be a negative trend recently, the issue of abusive insolvency petitions. Such petitions are filed in attempt to harm third persons, especially by negative consequences resulting from the publication of their name in the insolvency register.

In its decision issued earlier this year under ref. no. 8 Tdo 1352/2014 the Criminal Division of the Supreme Court rejected the appeal of a person convicted for the offenses of extortion and defamation on the basis of filing an abusive insolvency petition. The decision was subsequently included in the so-called green collection of decisions that contains key decisions, whose findings should be used to guide decisions of lower courts.

In the published ratio of the decision the Supreme Court explicitly states that filing an insolvency petition (i) with an intention to force the injured party to performance to which this party is not obliged, (ii) under knowingly false facts and (iii) without factual existence of circumstances that satisfy the conditions bankruptcy, is not allowed and can be regarded as a threat of other serious harm within the meaning of the criminal offence of extortion. In case the petition is filed with the intention to cause adverse effects arising from publication of the false information (e.g. threat to competitiveness or loss of goodwill), this can be considered as other serious harm within the meaning of the criminal offence of defamation.