This section portrays the timeline and milestones of the settlement process, key deadlines, events and steps of importance in reaching a settlement.
Publication of the basic structure of the Settlement Plan
December 20, 2017 – Public disclosure of the basic Settlement Plan structure which does not define the content of the future settlement to be concluded by the creditors but the structure within which the final creditors’ agreement shall be defined
Ruling on verified and contested claims
January 15, 2018 – The Commercial Court in Zagreb has passed a Ruling on Verified and Contested Claims pursuant to the table of claims filed, table of rights to separate recovery and table of secured rights submitted to the Court by the Extraordinary Trustee on November 9, 2017. By this ruling the Court also decided on referring certain claims to litigation proceedings in order to be verified or contested. At the same time, all creditors have the right to lodge a complaint against the ruling passed to the extent pertaining to a particular claim filed or a claim contested by the Extraordinary Trustee.
Order of the Commercial Court of Zagreb determining the number of members of the creditors’ council
January 26, 2018 – By the order of the Commercial Court, file no. 47. St-1138/17-1932, the number of members of the creditors’ council has been determined and creditors have been classified into groups pursuant to the proposal of the Extraordinary Commissioner. By the ruling of the same court the Extraordinary Commissioner has been instructed to invite creditors to elect members of the creditors’ council.
The creditors council shall consist of 5 members. The creditors have been classified into the five groups.
Invitation to creditors to elect members of the creditors’ council
February 1, 2018 – Complying with the Ruling of the Commercial Court and the provision of Article 30, para. 1 of the Law on Extraordinary Administration Proceeding in Companies of Systemic Importance for the Republic of Croatia (“Law”), the Extraordinary Commissioner hereby invites creditors whose claims have been determined to notify the Extraordinary Commissioner and the court of their elected members of the creditors’ council within 30 days.
Permanent Creditors’ Council
The commencement of the procedure of convening of a permanent creditors’ committee is dependent on the Ruling on Verified and Contested Claims becoming final and enforceable.
The Ruling on verified and contested claims is expected in first half of January 2018, but it will only become final and enforceable once all possible appeals filed against it are resolved.
The Extraordinary Trustee shall within five days of the Court’s passing of the Ruling on verified and contested claims call on the creditors whose claims have been verified to inform, within a further 30-day period, the Extraordinary Trustee and the Court about the relevant members of the Creditors’ Council. On the occasion the Extraordinary Trustee shall indicate the distribution of creditors across classes. Each class of creditors chooses one member of the Creditors’ Council.
Should a class of creditors fail to nominate a representative member within 90 days of the day of publication of the Extraordinary Trustee’s call, the said representative member shall be appointed by the court within 8 days of the expiry of the said 90-day period.
Settlement Plan presented to the Creditors’ Council for voting
Not later than by early April – the draft Settlement Plan to be presented to the Creditors’ Council and put to the vote.
Settlement Plan submitted to the Commercial Court in Zagreb
Not later than April 10, 2018 – draft Settlement Plan to be submitted to the Court.
Court to publish the proposed Settlement Plan
Immediately upon submission of the Settlement Plan (expected) – the Commercial Court in Zagreb to publish the proposed Settlement Plan on the courts’ e-Bulletin Board available at the address https://e-oglasna.pravosudje.hr/. Upon expiry of three days as of the publication of the Settlement Plan on the Court’s e-Bulletin Board the Settlement Proposal shall be considered to be duly delivered to all creditors.
Settlement Voting Hearing
Not less than 5 and not more than 15 days as of the day the Court receives the Settlement Plan the Commercial Court in Zagreb shall schedule and hold a hearing at which the creditors shall vote on the settlement.
The Settlement shall be considered accepted if the majority of all creditors has voted in its favour and if in each creditor group the sum of claims filed by creditors who have voted in favour of the settlement is greater than the sum of claims filed by creditors who have voted against accepting the settlement. Exceptionally, the settlement shall be considered accepted if the total sum of claims filed by creditors who voted in favour of the settlement amounts to not less than two thirds of the total claims.
Upon proposal of the Extraordinary Trustee the Court shall establish a list of creditors and voting rights held by them in the hearing. For the purpose of the settlement voting hearing it shall be considered that voting rights are held by all creditors whose claims have been verified. Creditors with contested claims shall be recognized to hold voting rights if at the settlement voting hearing the Extraordinary Trustee and the attending creditors with voting rights so agree. If an agreement cannot be reached, the decision shall be made by the court at the hearing by way of ruling against which no special complaint shall be permitted.
The creditors whose contested claims are in litigation for possible verification will have the right to vote on the settlement should their claims be verified before the court by the time of the settlement voting hearing. Should the claims fail to be verified, the said creditors will not have voting rights. Necessary reservations shall be made in the settlement so that the creditors might be paid on the basis of settlement should their claims be verified at a later date.
No voting rights are held by affiliated persons subject to the extraordinary administration procedure.
The Court confirms the Settlement
The Commercial Court in Zagreb confirms the settlement adopted upon conclusion of the voting hearing on the settlement proposal, if the settlement has been accepted by the creditors. In doing so the Court is not bound by any time limitations. The Court’s Ruling on the Settlement Confirmation has the power of a deed of foreclosure.
The settlement produces legal effects as of the day of passing the Ruling on the Confirmation of Settlement towards all creditors including those who have not participated in the procedure as well as those who have participated in the procedure and whose contested claims are subsequently verified.
The Settlement or a summary of its material content shall be published on the Courts’ e-Bulletin Board available at the address https://e-oglasna.pravosudje.hr/. The information on closing the settlement shall be entered into the court registry in which the debtor is registered.
The Court shall by virtue of the office withhold the confirmation of the settlement only if:
- it finds that the provisions on the content of the settlement and proceedings during the course of its preparation and passing as well as on the acceptance by the creditors have been materially violated, unless such shortcomings can be remedied or
- if the acceptance of the settlement has been achieved in an impermissible way.
Period of settlement implementation
The Settlement shall be implemented pursuant to the rules stipulated in the wording of the Settlement as confirmed by the Commercial Court in Zagreb.
Completion of the Extraordinary Administration Procedure
The Extraordinary Administration Procedure shall end with:
- the implementation of the Settlement, or
- the legal coming into force of the Ruling on the abolition of the Extraordinary Administration procedure due to the Court not having approved the Settlement, or
- the expiry of 15 months as of the day of opening the Extraordinary Administration Procedure if no Settlement has been concluded within the respective deadline, i.e. on July 10, 2018.