LIABILITY OF THE STATE TREASURY TOWARDS SHAREHOLDERS OF THE BANKRUPT FOR DAMAGE CAUSED BY THE BANKRUPTCY COURT BY WRONGFUL BANKRUPTCY DECISION

Abstract

This study addresses the issues related to the State Treasury’s liability for damages towards the debtor’s shareholders due to an erroneous decision on the bankruptcy option instead of the restructuring option. The proceedings are initiated at the request of the entitled person. The court decides about opening the proceedings. In practice, there may be a situation in which competing applications are submitted, either aimed at liquidating the debtor’s assets or at its restructuring. The study refers to two legal states: the legal state in force in 2003–2015 and the legal state in force since 2016. The study analyzes the statutory criteria for resolving the conflict between the liquidation and restructuring option, and the premises of the State Treasury’s liability for damages. In the event of such a conflict, the insolvency law gives priority to restructuring over liquidation.