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When a Creditor Calls for Liquidation

26.07.2019

In a decision handed down on 24 April 2019 (file no. 27 Cdo 3483/2017), the Czech Supreme Court addressed the issue of calls for the wind-up of a company brought by a third party with a legal interest in the proceedings. According to the court, a party is held to “have a legal interest” under section 93 of the Business Corporations Act if the company’s liquidation affects the party’s legal status, i.e. its substantive rights or duties. A mere “moral”, “economic” or other “non-legal” interest does not suffice. The court found that it was not enough to claim that a court-appointed liquidator would have better access to information about the company’s assets, which might improve the petitioner’s chance of obtaining (at least partial) reimbursement of sums owed. Such circumstances could represent an economic interest in the company’s dissolution and liquidation but they would not suffice to establish a “legal interest”. As the court pointed out, when it comes to gathering information about the company’s assets, a court-appointed liquidator does not have greater powers vis-à-vis the company’s director or third parties than a bailiff enforcing a debt.