Central & Eastern Europe: Hungary for change
The Hungarian Government has drafted legislation that will overhaul the country's insolvency regime and introduce laws covering restructuring for the first time. In the process of drawing up the draft, the Government has cast its eye overseas to glean the best of restructuring laws worldwide. Dr Erika Papp and Ashley Smith explain
Hungary is currently drafting new insolvency legislation. At present, there is no law in Hungary that governs restructuring and reorganisation, as the legislation only extends to the formal procedures of liquidations, bankruptcy and voluntary dissolutions. Debt restructurings have, to date, only been made on a voluntary contractual basis, where the financing banks and the debtor have typically put in place a standstill agreement and subsequently agreed a restructuring plan, which, when successfully carried out, helped the borrower to restructure and continue its business.
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