(13) These data differ considerably from the data obtained by the Commission from the Slovak authorities and stated in the decision to open the formal investigation(6). In their reaction to the comments of the beneficiary after the opening of the formal investigation, the Slovak authorities did not dispute the accuracy of the above figures. According to the Slovak authorities, the beneficiary qualifies as a medium-sized enterprise.
2. APPLICABLE NATIONAL LEGISLATION
(14) The disputed measure is a write-off of a tax debt by the Košice IV Tax Office under an arrangement with creditors. This process is governed by Bankruptcy and Arrangement Act No 328/91 (the ‘Bankruptcy Act’).
(15) An arrangement with creditors is a court-supervised process, which, like bankruptcy, is designed to settle the financial situation of indebted companies(7). Under bankruptcy proceedings, the company ceases to exist and either its assets are sold to a new owner or the company is liquidated. In contrast, under arrangement proceedings, the indebted company continues to trade with no change of ownership.
(16) Arrangement proceedings are initiated by the indebted company. The purpose is to reach an agreement with its creditors whereby the indebted company pays off part of its debt and the remainder is written off. The agreement has to be approved by the supervising court.
(17) Creditors whose receivables are secured, for example by means of a mortgage, act as separate creditors. For the arrangement proposal to be accepted, all the separate creditors have to vote in its favour, whereas for other creditors a qualified majority suffices. In other words, separate creditors vote separately and have a right to veto the proposal.
(18) Separate creditors have a privileged position also in bankruptcy proceedings. The claims of the separate creditors may be satisfied at any time during the bankruptcy proceedings and any proceeds from sale of secured assets under the bankruptcy proceedings are meant to be used exclusively to satisfy the claims of the separate creditors. If the claims of the separate creditors cannot be covered from this sale, the remaining parts are put into the second group with the claims of the remaining creditors. In the second group, the creditors are satisfied on a
pro rata
basis.
(19) Under the Bankruptcy Act, the company applying for an arrangement with creditors has to submit to the supervising court a list of measures for its reorganisation and for continued financing of its activity after the arrangement.
(20) Under Act 511/92 on Administration of Taxes and Fees and Changes to the System of Local Financial Authorities (the ‘Tax Administration Act’), a company may ask the tax authorities to defer payment of taxes. Interest is charged on the deferred amount and the deferred debt has to be secured.
(21) The Tax Administration Act also governs tax execution, the aim of which is to recover the tax receivables of the State through sale of real estate, movable assets or of the firm as a whole.
3. THE FACTS
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