During a liquidation procedure claims of SMEs have priority over other (non-secured) claims. In one of its latest decisions, the Supreme Court of Hungary has studied if there is any possibility to change a claim’s position if it was assigned to an SME and the obligor was notified after the liquidation procedure had been ordered.
According to the Act on bankruptcy and liquidation, assigning a claim already registered by the liquidator will not change the sequence of satisfaction of the claims. This way the legislator tries to avoid malicious assignments and misfeasance. Nonetheless, if the assignment was established before the effective day of the liquidation, it may change the position of the claim regardless of the date of receipt of notice or performance order as per the Hungarian Civil Code by the obligor.
In this particular case, the liquidation procedure was preceded by an unsuccessful bankruptcy procedure in which the non-SME assignor was registered as a creditor and the assignment to an SME assignee was performed between the unsuccessful bankruptcy procedure and the effective day of the liquidation. Because of the assignment was performed before the effective day of the liquidation – following the literal wording of the act – we may come to the conclusion that the claim should be qualified pursuant to the status of the assignee.
But the Supreme Court’s verdict reads that if the liquidation procedure was preceded by an unsuccessful bankruptcy procedure and the assignment was performed during or after the bankruptcy procedure, the assignment cannot lead to a better position of the claim. It is because the assignor creditor was aware of the obligor’s financial status – he was a creditor in the bankruptcy procedure – and might have sized up what satisfaction he might be entitled to. Therefore, he is in a similar situation to cases when the assignment is performed after the effective day of the liquidation and this could lead to misfeasance in the liquidation procedure.