Studenac Has Not Yet Lost Pre-Bankruptcy: There Is a Way Out of A&G’s Blockade

After A&G Logistika 01 requested that bankruptcy be opened against Studenac and rejected its proposal for pre-bankruptcy, several possible scenarios are now opening up for the largest Croatian retail chain by number of stores. One of them could remove the obstacle to Studenac’s pre-bankruptcy even before the Commercial Court in Split decides which of the two proceedings takes precedence.

The claim of A&G Logistika could, in fact, be purchased by a third party, after which that creditor could withdraw the proposal for opening bankruptcy. Branko Skerlev from the law firm WAHL, which deals with restructuring and insolvency proceedings, warns of this possibility in a response to Lider.

– In practice, the simplest solution for all those interested in having the pre-bankruptcy proceed peacefully is for the creditor’s claim to be purchased by third parties, after which they withdraw the bankruptcy proposal – explains Skerlev.

The Bankruptcy Act allows the applicant to withdraw the proposal for opening bankruptcy until the decision to open bankruptcy proceedings is made. This means that if A&G Logistika withdraws its proposal, the obstacle on which it currently bases its request to dismiss Studenac’s pre-bankruptcy would be removed. Whether this will actually happen depends on the creditor and any potential buyer of their claim.

Studenac Cannot Simply Pay A&G

In this regard, Studenac could not resolve the problem simply by paying the disputed debt itself.

– Studenac cannot pay this itself, as from the day of submitting the proposal it is only allowed to make payments necessary for regular operations – emphasizes Skerlev.

Namely, restrictions for the debtor occur as soon as the proposal for pre-bankruptcy is submitted. From that moment, only payments necessary for regular operations are allowed, and the debtor may not alienate or encumber their assets. Therefore, any potential solution would have to come from someone else.

Skerlev also explains why A&G might be interested in such an agreement. From the creditor’s perspective, he says, it is an opportunity to collect the claim immediately and in full from a third party, rather than waiting for the outcome of restructuring and the possible write-off of part of the receivable.

– The one who holds the key to blocking the proceedings has a strong negotiating position – states Skerlev.

Two Proposals Are Separated by Only Two Hours

The entire problem, let us recall, arose because both proposals, for bankruptcy and pre-bankruptcy, were submitted on the same day, September 23, but not at the same time. A&G Logistika submitted the proposal for opening bankruptcy at 5:10 PM, while Studenac’s proposal for pre-bankruptcy was received at 7:16 PM.

– The law states that if bankruptcy proceedings have been initiated, it is not permitted to initiate pre-bankruptcy, and the proceedings are initiated by submitting a proposal, not by a court decision – explains Skerlev the argument on which A&G bases its request.

He also warns of the decisions of the High Commercial Court from 2025, in which, according to his analysis, it was decisive in such situations which proposal was received first, not which file received a lower number.

The court must now decide precisely on that obstacle. Skerlev reminds that the court must decide on the complete proposal for pre-bankruptcy within eight days, while in the case of an incomplete proposal, it gives another eight days for supplementation. If the legal prerequisites are met, the court opens pre-bankruptcy with the same decision and appoints a commissioner.

Pre-Bankruptcy or Bankruptcy

If the court accepts A&G Logistika’s argument, the consequence for Studenac would be very concrete.

– If the court accepts the creditor’s thesis, the pre-bankruptcy is dismissed, and Studenac remains in bankruptcy proceedings according to the creditor’s proposal – without a moratorium and without protection from supply interruptions – states Skerlev.

This protection is precisely one of the main reasons why pre-bankruptcy is a significantly more favorable scenario for Studenac. By opening the proceedings, enforcement for old claims is halted, FINA ceases to execute existing payment orders against accounts, and new ones are not registered in the Registry. Perhaps even more important for the retail chain is the question of suppliers.

– A creditor from a contract essential for the continuation of business, including supply, may not withhold performance or terminate the contract simply because an old debt has not been paid or pre-bankruptcy has been opened – explains Skerlev. New goods delivered after the opening of pre-bankruptcy, he adds, must be paid for regularly.

The management remains at the head of the company. The commissioner does not take over Studenac but supervises its financial operations, examines the reported claims, assists in preparing the plan, and approves transactions that go beyond regular operations.

The Account Can Be Blocked Again

Skerlev warns that the protection from enforcement that Studenac receives by opening pre-bankruptcy is not unlimited. The initial moratorium lasts 120 days. It can be extended two more times for 90 days each, or a maximum of 300 days in total, but only if there is progress in negotiations and the request is submitted in a timely manner.

– If the court does not deliver the decision on the extension to FINA before the deadline expires, FINA will continue with the enforcement on its own – warns Skerlev.

In other words, as he emphasizes, the account can be blocked again even though pre-bankruptcy is still formally ongoing. If the proceedings were opened at the beginning of October, the first protection deadline would expire at the beginning of February 2027, after which, if the conditions are met, the protection could be extended at most until the beginning of August.

Salaries Are the Red Line

Workers have a special position.

– Salaries are paid, and that is a condition for the survival of the proceedings – emphasizes Skerlev.

Workers’ claims do not enter the restructuring plan, and a delay in salary longer than 30 days is a reason for the court to suspend pre-bankruptcy.

This is particularly important for Studenac given the number of employees and the amount that the company must secure each month just for salaries.

What Will Studenac Offer to Creditors

Skerlev also warns of one fact that is easily overlooked at this moment: the final restructuring plan does not yet exist.

– Creditors do not know what is being offered to them at this moment. First, it is determined who claims what, and only then does the debtor come up with an offer – he explains.

First, therefore, claims are reported. Studenac and the commissioner express their views on them, creditors can dispute mutual claims, FINA prepares tables, and the court then determines the recognized and disputed claims. Only after that must Studenac present the restructuring plan.

The plan should encompass financial and operational restructuring, a business plan, an offer to creditors, and possibly new financing, and show that the company has reasonable prospects for continuing operations after the implementation of the plan.

And the Silence of Creditors Counts as a Vote For

And the voting rules, notes Skerlev, give the debtor a relatively strong framework for attempting restructuring.

Voting is done by groups of creditors, and a simple majority by the value of claims is not enough for the acceptance of the plan. As Skerlev explains, in each group, the majority of creditors must vote for the plan, and the amount of claims of those who voted for the plan must exceed twice the amount of claims of those who voted against.

But there is one unusually important provision.

– A creditor who does not submit a voting form is considered to have voted for the plan – emphasizes Skerlev.

If there are multiple groups of creditors, the opposition of one group does not automatically have to collapse the restructuring. Under certain conditions, the court can confirm the plan even against its opposition, through the so-called cross-class cram-down.

Skerlev therefore assesses that the legal framework after the amendments from 2022 is extremely favorable to the debtor, but warns that this does not mean that the court must confirm every plan.

The court can deny confirmation if it concludes that the plan obviously has no reasonable prospects of preventing insolvency or if certain creditors are unlawfully harmed by it.

Fresh Money Needed

One of the key practical questions will also be where Studenac will finance its operations while restructuring lasts.

– To bridge liquidity during the proceedings, the debtor can take temporary financing – states Skerlev.

For this, he needs the consent of creditors holding more than two-thirds of the established claims, and such financing, after court approval, has priority over other creditors in any subsequent bankruptcy.

For Studenac, this is particularly important because the moratorium halts the collection of old debts but does not finance new goods, salaries, and daily operations. That is why the ability to secure fresh money will be one of the key tests of the company’s sustainability during the proceedings.

No More Than Ten Months for an Agreement

The pre-bankruptcy itself does not have an unlimited deadline.

The basic deadline is 120 days from its opening, and it can be extended for an additional 180 days if there is progress in negotiations. Skerlev particularly warns that the duration of the proceedings and the protection from enforcement are not the same thing, but run parallel and are extended separately.

If Studenac does not submit the plan on time, if creditors who can block the plan withdraw from negotiations, or if the plan is ultimately not confirmed, the consequence is bankruptcy.

– There is no return to normal: the alternative to a successful pre-bankruptcy is bankruptcy, not status quo – summarizes Skerlev.

According to his estimate, therefore, three questions will be crucial in the coming months: whether lenders and banks will agree to a restructuring or conversion of debt, whether Studenac will manage to secure temporary financing for the procurement of goods, and whether suppliers will accept the conditions offered to them through the plan.

– In the next six to eight months, Studenac will operate under court supervision, with a moratorium on old debts and protection from supply interruptions, while trying to negotiate a plan with banks and suppliers – concludes Skerlev.