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Creditor defence rules relaxed for mergers

05.09.2006

The Commercial Code has been amended in order to reduce the time it takes to carry out a merger procedure. The new rules came into force on January 1 2006.

The law required that the management of a merging company should (i) notify all its known creditors within 15 days of the merger decision at the general meeting, and (ii) publish two notices of the merger in the Official Journal, with a gap of 15 days between them. An application to register the merger in the Commercial Register could be filed three months after the publication of the second notice in the Official Journal.

The new rules shorten this process by allowing an application to register the merger in the Commercial Register to be filed just one month after the merger decision at the general meetings of the merging companies. The notices to creditors are now published after the merger is entered in the Commercial Register.

The earlier version of the law obliged the merging company to secure (by pledge or similar) all creditors' claims presented as a result of the merger notices. This rule was burdensome and unreasonable, giving creditors which had by agreement entered into an unsecured debt relationship the statutory right to become secured creditors.

The new regulation allows only those creditors that can prove that the merger may endanger the fulfilment of their claims to request security for their claims. The claims must be presented within six months of the merger.

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