Edis Felić: Fina does not accept promissory notes as soon as the pre-bankruptcy procedure begins

A recent article in Lider discussing how Hrvatske šume has not yet activated the promissory note of the company Viševica komp, which is in pre-bankruptcy proceedings, prompted one entrepreneur to contact us. He pointed out the problem of activating the promissory note in the pre-bankruptcy procedure because Fina did not want to accept it. They told him at Fina that in this case, it cannot be collected. Given that, as we hear from him, other entrepreneurs he contacted were also unaware of this, we asked Fina on what basis they reject the promissory notes of pre-bankruptcy debtors.

Everything is erased

Fina states that according to the latter law, proceedings are ongoing for cases initiated before September 1, 2015, i.e., before the new Bankruptcy Act. Nevertheless, nothing has changed regarding this. If a creditor submits a promissory note for collection, which is equated with a final enforcement decision under the Enforcement Act, Fina will not record it in the Register of Payment Orders, meaning it will not execute it, but will return it to the creditor with the explanation that a pre-bankruptcy settlement procedure is being conducted (Article 70, paragraph 5 of the ZFPPN). Likewise, they say, if at the moment of opening the pre-bankruptcy settlement procedure the promissory note is already recorded in the Register, it is of no use to you because Fina will not execute it since from the publication of the decision to open the pre-bankruptcy settlement procedure, Fina ceases to execute payment orders recorded in the Register against the debtor. Therefore, as they explained to us at Fina, anyone who did not timely submit the promissory note no longer has value, and as we have seen, even creditors who submitted the promissory note are not sure if it has been collected by the time the pre-bankruptcy procedure is initiated, even though it is registered in the Register. The reason is that in the procedure, creditors forgive part of the debt, so even the promissory note, even if blank signed, is no longer valid. As they say at Fina, ‘in the case of concluding a pre-bankruptcy settlement, the mentioned payment orders will be permanently archived, given that enforcement documents related to claims from the concluded pre-bankruptcy settlement lose legal force concerning the debtor.

Only one way

Even in bankruptcy proceedings, according to the current Bankruptcy Act, the promissory note cannot be activated because there is a bankruptcy repayment plan. There is only one way to activate it in the pre-bankruptcy procedure – if the procedure is suspended. Then there is no longer the possibility of an agreement between the creditor and the debtor, which means that Fina will continue to execute collection until there is money in the account, i.e., until the company goes bankrupt. The problem with the Bankruptcy Act is also that creditors, to find out whether their debtor is in bankruptcy or pre-bankruptcy, must search all commercial courts in the country. The centralized publication that used to be in Narodne novine has been abolished, and this is one of the most nonsensical things about that law, which we wrote about in early September. Despite this, it would be best to check your debtor after the payment deadline expires and to submit the promissory note to Fina as soon as possible, within two to three days, if they are in a bad position. This is the only chance to collect receivables before the pre-bankruptcy procedure overtakes you.