Preliminary communication
https://doi.org/10.30925/zpfsr.43.3.12
CONTESTABILITY OF TRANSACTIONS AT AN UNDERVALUE OF AN INSOLVENT DEBTOR
Antun Bilić
orcid.org/0000-0001-5144-0821
; Faculty of Law, University of Zagreb, Zagreb, Croatia
Marko Bratković
orcid.org/0000-0003-0893-6682
; Faculty of Law, University of Zagreb, Zagreb, Croatia
Abstract
Transactions at an undervalue of an insolvent debtor are, in principle, contestable
because the interests of the opponent of the contestation, who acquired a part of
the assets from the insolvency estate without consideration or with insignificant
consideration, must take the back seat to the collective interest of insolvency creditors
in equitable debt collection. The Insolvency Act (Article 203) provides a special
basis for contesting transactions at an undervalue undertaken in the suspect period
counting from four years prior to filing for (pre-)bankruptcy proceedings up to the
opening of the insolvency proceedings. An authorized contester does not have to
prove any subjective elements on the part of an insolvent debtor or the opponent of
the contestation. When distinguishing transactions carried out at an undervalue from
those performed for consideration, the consideration was provided if the opponent of
the contestation incurred or undertook to incur any kind of expense of an appropriate
value and if that expense is causally linked to the transaction of an insolvent debtor. If
any of these requirements are not met, the transaction is at an undervalue. If the debtor
secured a claim of a creditor towards a third party without receiving consideration,
such transaction is still not without consideration provided that the creditor gave a
corresponding consideration to the third party (e.g. by granting a loan). Contested
transactions – despite certain confusing provisions– are subject to the general rule that
the contested transaction has no effect on the insolvency estate and that the opponent
of the contestation must restitute to the insolvency estate any benefits derived from
the contested transaction.
Keywords
contestability of transactions of an insolvent debtor; transactions at an undervalue; transactions performed for consideration; securing someone else’s debt; (unjustified) enrichment of the opponent of the contestation.
Hrčak ID:
287853
URI
Publication date:
20.12.2022.
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