Orešar attempted to exploit the sloppiness of the pre-bankruptcy settlement law

The Ministry of Finance submitted a request in July to suspend the pre-bankruptcy settlement proceedings against the debtor Hotels Novi, stating that the data published in the proceedings clearly shows that the company is not conducting registered business activities and that a large part of its obligations is owed to related companies and individuals, which is why the Tax Administration initiated a procedure to determine the abuse of rights.

When it comes to related companies and individuals, the decision on the determination of claims indicates that individuals connected to the Novi Resort project, namely the owners of Hotels Novi d.o.o. Gordan Širola, Bruno Orešar, and Dario Kožul, are claiming hundreds of millions of kuna. Orešar’s claimed debt of 204.1 million kuna was recognized, Širola’s 207.5 million kuna, and Kožul’s 170.4 million kuna.

This is just one example of how debtors, through related companies, could place other creditors in a disadvantaged position and outvote them thanks to a legal provision that, in the original legal text, allowed related companies and individuals to appear as creditors in the pre-bankruptcy settlement proceedings.

Due to such cases, the Law on Financial Operations and Pre-Bankruptcy Settlements has been amended, now stipulating that ‘those solidary debtors, guarantors, and individuals with a right of recourse who have the legal status of related persons (members of the management board of the debtor company, members of the debtor company, or shareholders with a stake higher than 25 percent in the share capital of the debtor joint-stock company or the controlling company in relation to the debtor company or the dependent company in relation to the debtor company) do not have voting rights. Thus determined claims of creditors are not included in the total amount of determined claims for voting purposes.’

The problem, say those familiar with pre-bankruptcy settlement proceedings, is that the amended law applies only to newly opened pre-bankruptcy settlement proceedings, and not to old ones like the cases of Dalekovod or Nexe group. Although there was goodwill to correct this, a lapse evidently occurred in the Ministry of Finance as the legal changes were being prepared when Minister Slavko Linić dismissed a large part of the managerial staff in the Tax Administration, some of whom were involved in drafting the legal amendments.