We have two main remarks concerning the following chapter.
Two types of insolvency procedure
Under Hungarian law there are two types of insolvency procedure: bankruptcy and liquidation.
Bankruptcy (csödeljárás) allows for the possibility of establishing a restructuring plan for the debtor company, which may be prepared by the creditors and the debtor itself, in the course of a procedure guided and controlled by the court and the appointed receiver. Bankruptcy may only be initiated by the debtor company, aiming to restore its solvency. In this case the creditors may grant a moratorium for the debtor, during which a receiver controls the operation of the debtor taking into consideration the creditors’ interests. During the moratorium the creditors and the debtor try establishing a restructuring plan for the debtor.
Liquidation (felszámolási eljárás) may be initiated by the creditor, the debtor or ex officio by the court upon notice of the court which registered the debtor company. The court orders the liquidation of the debtor company where the legal requirements are met.
The two types of proceedings are independent of each other: bankruptcy does not continue as liquidation where there is no approved restructure plan established by the debtors and creditors.
There is an ongoing dispute about a new insolvency Act in Hungary. The first draft of the new Act is expected to be prepared in the autumn of 2006.
Notion of ‘family of companies’
Hungarian corporate law does not apply the concept of a ‘family of companies’. However, the Civil Code in one instance uses the concept of a ‘concentration of companies’, with regard to a specific type of fraudulent behaviour. The Insolvency Act also refers to this concept of a ‘concentration of companies’ on one occasion.
The new Company Act – which enters into force on 1 July 2006 – establishes two new legal devices, the contractual concern and the factual concern.
Contractual concern: The controlling and the controlled company may have registered themselves with the Registry of Firms as a contractual concern established by a ‘controlling contract’. This legal device aims to legalise the control of one company over another one without their having merged. Therefore, where the legal requirements of a contractual concern are met, the controlling company may lawfully control another company without being threatened by the sanctions of misuse of its control.
Factual concern:Where the controlling company does not have a registered contractual concern as to its controlled company, but the actual circumstances satisfy the requirements set forth by the new Company Act, the situation may be designated a factual concern. In these cases, if the controlling company can provide evidence that the legal conditions are met it is entitled to the same protection as if it were involved into a contractual concern.
These concern rules are favourable to the controlling companies, which do not want to merge by corporate law means with their controlled company but also do not want to be penalised for the exercise of their control. For the insolvency-related aspects see question 4.
Notwithstanding the above, Hungarian competition law applies the concept of ‘concentration of undertakings’ but this concept is not referred to in insolvency law.
A. DOMESTIC FAMILY OF COMPANIES
1. If insolvency proceedings must be commenced for the family of companies, does your law permit a joint proceeding, ie, a single court file, a single judge, a single list of creditors, single notice list, or must the case for each member of the family proceed separately with no practical acknowledgement of the related proceedings?
No. Hungarian law does not permit joint procedures. Under Hungarian law insolvency is designed for single companies and not for a family of companies.
Act XLIX of 1991 on Bankruptcy, Liquidation and Final Settlement (‘the Bankruptcy Act’) contains the applicable provisions for two main types of insolvency-related procedure: bankruptcy and liquidation.
(a) What if the members of the family are organised under, or operate in, different locations within your country? Can a company from a distant location in your country commence its bankruptcy proceeding where its affiliate is located, if the affiliate has already commenced its bankruptcy proceeding?
No. The bankruptcy and liquidation procedures fall within the exclusive competence of the county court having jurisdiction with regard to the seat of the debtor company (s 6(1) of the Bankruptcy Act). If the seats of the members of the family of companies are located in the same county the same court may proceed. If the seats of the members of the family of companies are located in different counties, different courts have competence for the procedures.
(b) To the extent your country has different types of insolvency proceedings (such as Chapter 11 reorganisation and Chapter 7 liquidation in the US), do the members of the corporate family all have to proceed under the same type of proceeding?
No. There is no objection to initiating different types of insolvency procedures against the members of the same family of companies at the same time. Where there are several ongoing proceedings against members of a family of companies, the various proceedings have no effect on each other: they are independent.
2. Does your law permit or prohibit a single administrator/trustee/ receiver to administer the assets and the liabilities of the entire corporate family?
Hungarian law permits such assignment. The same receiver may administer first the bankruptcy and then the liquidation procedure – where that follows bankruptcy – against the same company. Moreover, the same receiver may administer the procedure against several insolvent members of a family of companies. However, as there are no joint procedures, if the same receiver is appointed for several members of a family of companies, each appointment shall be performed by a single written resolution of the proceeding court; ‘joint appointment’ is not allowed.
The only conflict rule with regard to the receiver is that any natural or legal person who is or whose owner is an owner or creditor of the debtor, as well as the executive officers or their close relatives, may not be appointed as administrator/receiver of such debtor.
(a) If so, is there a hearing for the court to determine whether the administrator by a single party is appropriate? Are secured and unsecured creditors or other parties in interest allowed to object or be heard at such hearing?
There is no such hearing, but the proceeding court appoints the receiver by its written resolution. The receiver may be chosen from the official register of receivers. The receiver is obliged to notify the court within eight days from receiving the appointing resolution or from the occurrence of the reason, as the case may be, if such restricting reason exists.
(b) What about joint representation by other professionals, such as law firms or auditing firms?
There is no legal prohibition on such representation.
3. Does your law encourage or discourage overlapping boards or management teams for separate members of a corporate family?
Discourage. One person may be the managing director or a member of the managing board only at three companies at the same time. Any new appointment must be notified to the other companies. However, from 1 July 2006, under the new Company Act, Act IV of 2006, the only requirement is for the notification of the new appointment; the rule regarding the limited number of appointments will no longer apply.
(a) If the directors of a parent company are not directors of the subsidiary, but they either directly or indirectly manage the affairs of the subsidiary anyway, do your country’s laws render such people de facto or ‘shadow’ directors of the subsidiary?
No. The registered directors of a company hold all the responsibilities applicable for directors. (These are basically defined in the Act CXLIV of 1997 on Business Associations (‘the Company Act’).)
(b) Do the duties or responsibilities of officers or directors of a family of companies change when the companies become insolvent? For example does their duty shift from a responsibility to the shareholders to a responsibility to the creditors. What if only one of the companies is insolvent?
The rights of the directors are – practically – terminated, especially during insolvency procedures when these rights shift to the administrator/receiver.
4. Are there rules and do they change regarding members of the corporate family transferring assets among one another (such as by way of loans, capitalisation, other transactions) when the members are insolvent?
Yes, there are general rules regarding this issue, but not applying specifically to a family of companies, but between any two companies.
As to specific rules, the Bankruptcy Act sets out provisions with regard to ‘suspicious’ transactions that occurred during or before the liquidation procedure, mainly by allowing the receiver to challenge acts and contracts that are probably aimed at sweeping out the assets of the debtor company. These rules are as follows:
The creditor, and on behalf of the debtor, the receiver may file for legal action before
the court within 90 days from the time of acknowledgement or within 180 days from
the date of publication of the notice of liquidation to contest concerning:
(a) contracts concluded by the debtor within five years preceding the date when the court received the petition for opening liquidation proceedings or thereafter, or his other commitments, if intended to conceal the debtor’s assets or to defraud any one creditor or the creditors, and the other party had or should have had knowledge of such intent;
If the debtor enters into an agreement with its affiliated company, or with a shareholder or executive officer of such affiliated company, or with their relatives, in the application of points (a) and (b) above bad faith and/or gratuitous promise is presumed. Furthermore, bad faith and/or gratuitous promise is also be presumed when a contract is concluded between economic operators that are not directly or indirectly connected by way of affiliation, but are controlled by the same person or the same economic operator. [Section 40(3) of the Bankruptcy Act]
The Company Act contains provisions regarding companies having significant (more than
25 per cent), majority (more than 50 per cent) or controlling (more than 75 per cent) interest
in another company: If, as a result of the dominant member’s influencing interest amounting to at least majority control, a controlled company pursues a permanently detrimental business policy (including transfers), and as a consequence of this, the assets of the controlled company do not cover satisfaction of creditors upon the liquidation of the controlled company, the court may, upon the claim of a creditor lodged in the course of liquidation proceedings, establish the unlimited and full liability of the dominant member for the debts of the controlled company. [Section 296(1) of the Company Act]
If a dominant member holds a controlling interest in the controlled company, those creditors, whose unexpired claims against the controlled company originated prior to the publication of the influencing interest, may demand security up to the amount of their claims from the dominant member within a 90 day non-appealable deadline following such publication. [Section 296(2) of the Company Act]
In respect of a controlling interest, if the dominant member pursues a permanently detrimental business policy as a result of its controlling interest, and this seriously endangers discharge of the controlled company’s obligations, the court may, upon a claim by any member (shareholders) or creditor of the controlled company, establish the unlimited and full liability of the dominant member for the debts of the controlled company. [Section 296(3) of the Company Act] The acquisition of a significant, majority or controlling interest must be notified to the
Court of Firms within 30 days from the acquisition. In the event of delayed performance or non-performance of the disclosure obligation, in respect of a majority or a controlling interest, upon the liquidation of a controlled company, if the assets of the controlled company do not satisfy the liabilities to creditors, dominant members shall bear unlimited and full liability for the debts of the company incurred up until performance of the disclosure obligation (s 292(3) of the Company Act).
As from the entry into force of the new Company Act (1 July 2006) the rules regarding the detrimental business policy of controlling shareholders do not apply where a contractual concern has been registered as to the affected companies. Nor do these rules apply if the controlling shareholder can evidence its control and the circumstances satisfy the requirements of factual concern pursuant to the new Company Act.
(a) Are cash sweep procedures allowed, that is, all cash from all subsidiaries is swept out to one account controlled by one of the family entities and then redistributed among the family members to pay bills?
Under Hungarian law this is not an insolvency matter. In some special cases financial licensing issues may arise, but this may be examined in the specific case. However, no cash may be transferred without due reason and bookkeeping rules must be respected. It must be noted that once insolvency has been initiated all such transfers require approval of the receiver.
(b) What if the redistribution results in a healthy subsidiary funding the shortfalls in another subsidiary that is losing money?
Special transfers as detailed in question 4 above may be challenged by the receiver, but this depends mainly on the specific legal title, and may not be addressed generally.
5. How does your law treat claims of one member of a corporate family against other members of the corporate family?
In bankruptcy and liquidation all creditors of a company may announce their claims against the company. Therefore, from this aspect, there is no significance if the creditor is a member of the family of companies or not.
For the purpose of these procedures the term ‘creditor’ means any person who, before the opening of liquidation, has a claim, whether in money or in kind expressed in monetary terms, against the debtor based on a final and executable court ruling or administrative decision (executable document), or a claim which is not disputed or has been acknowledged by the debtor, or that is overdue. Furthermore, in bankruptcy, it includes any person who has a claim, whether in money or in kind expressed in monetary terms, which is not yet overdue at the opening of bankruptcy proceedings, but is acknowledged by the debtor (s 3(1)(c) of the Bankruptcy Act).
(a) Are such claims invalid or unenforceable?
No claim may be declared invalid or unenforceable solely because it is a claim of a member of the family of companies. The validity and enforceability of such claims – just as any other claims – is judged on the basis of the general rules.
(b) If not, are such claims on equal footing with those of third party creditors, or are they subordinated, or is there other treatment required or permitted under your law?
In general, claims of the members of the family of companies are not treated otherwise as ‘non-family’ claims with one exception defined in the Bankruptcy Act.
If the debtor granted a security deposit (óvadék) to a creditor as collateral of its claim, this creditor is treated differently depending on whether he and the debtor belong to the same family of companies.
If they do not belong to the same family of companies, the secured creditor is able to satisfy its claim from the security deposit, and after its satisfaction refund any excess collateral to the liquidator. If they do belong to the same family of companies the secured creditor must release the security deposit to the liquidator – who acts as the representative of the debtor – on publication of the notice of liquidation. In such cases the receiver proceeds according to the security deposit agreement (s 38(5) of the Bankruptcy Act). The receiver pays the amount due upon the security deposit agreement to the secured creditor, if the security deposit agreement has not been contested within the legal deadline (see question 4).
6. How does your law allow for the pooling of assets and liabilities of all members of the corporate family, so that a creditor of one member becomes, in essence, a creditor of all members sometimes referred to as ‘substantive consolidation’.
Considering that under Hungarian law no insolvency procedure may be started against a family of companies, but only against single companies, substantive consolidation is not allowed.
(a) If so, is such pooling automatic or does it require a factual showing and court involvement?
Not applicable.
(b) What proceedings (motion, request, trial, etc) are required for the court to order the pooling of assets and liabilities?
Not applicable.
(c) Does your country’s law contemplate any partial pooling of assets and liabilities?
Not applicable.
(d) If the pooling of assets and liabilities is called for, are there any protections for certain types of creditors, such as creditors with a lien or other security interest in particular assets?
Not applicable.
7. How are secured creditors treated with respect to a family of companies? For instance, if a creditor has a security interest in the assets of one member of the family, and a guarantee from another member of the family, are both such claims valid in insolvency proceedings of the entire family?
According to the Bankruptcy Act secured creditors are preferred to non-secured creditors. A predetermined order defined by section 57 of the Bankruptcy Act relating to the satisfaction of various claims must be followed. For instance, secured creditors (the secured claims) shall be satisfied immediately after liquidation expenses, which must be satisfied first. Claims such as alimony and life-annuity payments may only be satisfied after secured claims. As noted above, each liquidation procedure regarding the respective members of a family of companies is treated separately. Consequently, this order must be taken into consideration in each procedure.
8. Do your laws or courts provide for post insolvency commencement of new financing that allows continued operation of the business and provides adequate protection to the lender who made the loan? Explain.
There is no protection to the lender providing new financing: the loan cannot be treated separately from the insolvency proceeding in the very same debtor (company).
In bankruptcy, the indebted company is further operating without any formal approval of creditors or the receiver. The bankruptcy procedure purports to restructure the company’s operation; accordingly, the debtor may launch new financing in accordance with the restructuring plan established by the creditors and the debtor. If the amount of the loan exceeds the limit set by the creditors (the creditors provide this limit in order to prevent the debtor incurring additional significant debts), the approval of the receiver is also needed.
In the course of the liquidation procedure the operation of the debtor may be continued on the resolution of a certain number of the creditors prescribed by the Bankruptcy Act.
Such resolution lasts for one year, after which the receiver must request from the creditors their approval for the continuing of the operation. Where the operation continues, new financing vehicles may be necessary. Given that the receiver must undertake the control over the debtor’s management, any new financing must be approved by the receiver taking into account the best interests of the creditors.
If a lender wants to make a new financing, this loan will be considered to be an asset acquired during the insolvency proceeding and, as such, will be subject to the liquidation (and bankruptcy) proceedings (s 4 of the Bankruptcy Act). Should, however, the debtor regain its solvency through the new financing, the debtor may enter into a settlement with the creditors
– in both the bankruptcy (s 18 of the Bankruptcy Act) and the liquidation (s 41 of the Bankruptcy Act) proceedings – and by so doing preserve the debtor company. The debtor shall provide a programme to restore or preserve solvency indicating the manner in which the debtor wishes to carry out the restructuring of the company. Additionally, the debtor may request – upon the commencement of the liquidation proceeding – a maximum of 30 days to settle its debt (s 26 of the Bankruptcy Act).
9. Are directors and officers subject to civil or criminal sanctions if:
(a) Fraud or misrepresentation of a company’s finances are discovered?
Civil sanctions
The Company Act imposes a general obligation on the executive officers under which they are jointly and severally liable for any damage resulting from the incorrectness of any data, rights or facts reported or from any delay in filing or failure to report (s 26 of the Company Act). This is a general provision that applies throughout the operation of a company and not just during insolvency. (The responsibility of the executive officers is only to the company itself. It is the company that is responsible to third persons.)
In addition to this general responsibility, the Bankruptcy Act also addresses the issue. The CEO of the company under liquidation is required to prepare a closing inventory, annual report, simplified report and balance sheet (s 31 of the Bankruptcy Act). Should the CEO of the company fail in this obligation he/she may be subject to a fine of up to 50 per cent of his/her income received last year from the company or up to HUF 1 million (approximately €4,000) (s 33 of the Bankruptcy Act).
Criminal sanctions
Criminal liability may arise under the Act IV of 1978 on the Criminal Code (the CC). Under section 289 of the CC any person – that is the executive officer in our case - who violates annual reporting, bookkeeping and auditing obligations prescribed in the Act C of 2000 Accounting Act and thereby obstructs the transparency or inspection of his/her – in our case the company’s – financial situation is guilty of a misdemeanor punishable by imprisonment, community service work or a fine. Imprisonment may be for a period of three years if the violation is substantial. Naturally the notion of ‘substantiality’ is to be interpreted by the respective courts.
The CC contains provisions regarding protection during bankruptcy too. Under section 290(5) any person who following the opening of the liquidation proceeding fails to comply with his/her obligation of reporting, inventory or other related provisions and thereby obstructs the liquidation proceeding is guilty of a felony punishable by imprisonment for up to three years. This prohibition deals specifically with misrepresentation in an insolvency proceeding.
(b) They allow the company to continue to operate while knowing it does not have the ability to pay the debt being incurred?
Civil sanctions
Under section 29 of the Company Act the executive officers are required to conduct the management of the company with the increased care generally expected from persons occupying such position. It follows that the executive officers are responsible – in accordance with the general liability rules of the civil law – for any conduct that is continuously causing harm to the company. (The responsibility of the executive officers is only to the company itself. It is the company that is responsible to third persons.)
Criminal sanctions
Under section 290 of the CC any person who – in connection with his/her insolvency – commences or continues a loss in contravention to the requirements of reasonable management and thereby prevents the satisfaction of the creditors to any extent is guilty of a felony which is punishable by imprisonment for up to five years. Should the action of the person lead to grave consequences for the overall economy, the imprisonment may be for a term of up to eight years. (This is the maximum sentence and is rarely applied.)
A general, not only bankruptcy-related, prohibition is set out by section 319 of the CC. It provides that a person who wrongfully – by violating his/her obligation under a contract or in other laws – takes or uses another’s money that has been entrusted to him for a specific purpose commits the misdemeanor/felony of ‘misappropriation of funds’. Punishment ranges from a fine to five to ten years imprisonment, depending on the severity of the pecuniary injury caused by this action.
(c) Same as (b) above but the directors believe that if some event occurs (eg, chance to obtain new contract in prospect, new equity infusion, or new financing) it will be able to save the company and pay its bills?
Civil sanctions
The conduct is tested under the above-mentioned requirement of section 29 of the Company Act: one should examine whether the continuance of the operation in reliance of certain events was in accordance with the obligation of increased care generally expected from the executive officers. (The responsibility of the executive officers is only to the company itself. It is the company that is responsible to third persons.)
Criminal sanctions
Under sections 290 and 319 of the CC one should look into the reasonableness of the conduct of the officer (s 290) and examine whether the obligations of the officer were violated (s 319), so that his/her action amounted to at least a misdemeanor under either of the two cited provisions. The courts will determine if the action of the officers met or failed these tests.
B. INTERNATIONAL FAMILY OF COMPANIES
1. If one or more members of the corporate family is incorporated under or governed by the laws of another country, does that change your answers to any of the questions set forth above?
We have set out the position under Hungarian law. Of course, if pursuant to international private law conflict rules set out below the laws of another country are applicable, Hungarian law is either not applicable or is applied in an amended form as indicated below.
Law Decree No XIII of 1979 on International Private Law (the Law Decree No 13 of 1979) provides conflict rules regarding insolvency proceedings. Pursuant to Law Decree No 13 of 1979 Hungarian courts have exclusive jurisdiction with respect to insolvency proceedings against entities established under Hungarian law. However, the jurisdiction of the Hungarian courts is excluded in case of insolvency proceedings against entities established under the law of a foreign country. It must be stressed that there are no provisions concerning the insolvency of a corporate family.
With respect to insolvency proceedings involving only EU Member States (such as Hungary) different rules apply. Council Regulation (EC) No 1346/2000 of 29 May 2000 on Insolvency Proceedings (the Regulation) provides for conflict rules regarding insolvency proceedings crossing the border of the respective Member States.
Pursuant to the Regulation insolvency proceeding may be initiated against a debtor in the EU Member States where the centre of the debtor’s main interests are situated (the main proceeding). In case the debtor has an ‘establishment’ in another EU Member State a ‘secondary proceeding’ may be initiated against the debtor in this other EU Member State. This secondary proceeding affects only the assets of the debtor situated in the territory of the given EU Member State. ‘Establishment’ pursuant to the Regulation means ‘any place of operations where the debtor carries out a non-transitory economic activity with human means and goods’. The court will have to determine whether such ‘establishment’ is equal to a ‘company’ under Hungarian law or it only covers a group of assets. However, it is to be noted that the above rules of the Regulation, in our opinion, do not refer to joint insolvency proceedings against ‘corporate families’ but to several insolvency proceedings launched against the same debtor company in different EU Member States based on the ‘establishments’ of the debtor company.
2. If insolvency/restructuring proceedings are instituted for corporate family members in different countries:
In answering these questions it should be noted that we do not have special rules regarding corporate family members. Our answers relate to general insolvency proceedings.
(a) What controls as to where the case must be filed (eg, centre of main interest, principal business, location of parent, etc)?
The main conflict rule relates to the ‘place of foundation’ (lex domicilii).
Pursuant to Law Decree No 13 of 1979 Hungarian courts have exclusive jurisdiction with respect to insolvency proceedings against entities established under Hungarian law, that is an insolvency proceeding against a debtor domiciled in Hungary. However, the jurisdiction of the Hungarian courts is excluded in the case of insolvency proceedings against entities established under the law of a foreign country.
Within the boundaries of the EU, according to Article 3 of the Regulation, the court of the EU Member State within the territory of which the centre of a debtor’s main interests is situated shall have jurisdiction to open the above-mentioned main proceeding. Parallel to the main proceeding another insolvency proceeding (‘secondary proceeding’) may be initiated at the competent court of another EU Member State against the debtor if it possesses an ‘establishment’ within the territory of that other EU Member State. In both cases the law of the court opening the insolvency proceeding is applicable to the proceeding. It is to be noted that these proceedings are launched against the same person (the debtor) not against different companies belonging to a ‘corporate family’.
(b) Do the courts attempt to exercise jurisdiction over the assets of the company filing domestically no matter where located (for example, overseas), or do they limit their jurisdiction to only those assets located in your country?
Section 4 of the Bankruptcy Act lays down that all assets held by the company under bankruptcy or liquidation proceeding at the time of the opening of the proceeding as well as assets acquired during the proceeding shall be subject to the proceeding. Consequently there is no distinction between assets wherever they are located: the opening court has jurisdiction with respect to all of the assets.
With respect to EU insolvency proceedings, Article 16 of the Regulation establishes international jurisdiction for the courts opening the main proceeding, ie it has jurisdiction over the assets of the debtor company no matter where located. However, should a secondary insolvency proceeding be initiated over the assets located in the territory of the court of the secondary proceeding, that court will have jurisdiction. In such case the proceedings should be in conformity with each other and the receivers have to co-operate.
It is important to note that court(s) and receiver(s) may only dispose of the assets of one company, the debtor company. The assets of subsidiaries (of the companies belonging to a ‘corporate family’) shall remain intact.
(c) Would your courts enforce a court order from a foreign country that attempted to exercise jurisdiction over the assets located in your country but owned by the company that is subject to the foreign insolvency proceedings?
Yes they would, though with some restrictions.
Under section 70 of Law Decree No 13 of 1979 (on international private law), decisions of foreign courts or foreign authorities cannot be recognised if the Hungarian courts or authorities have exclusive jurisdiction over the matter to which the decision pertains. Decisions, however, are recognisable if the state handing it down had legitimate jurisdiction, applied the proper law, and there exists no reason (ie public policy etc) to refuse jurisdiction (s 72 of the same Decree). Should the recognition conditions exist, the decision should be executed according to Hungarian law.
As noted above, courts of EU Member States initiating the main proceedings have international jurisdiction (Art 3 of the Regulation). Article 16 of the Regulation specifically provides for the recognition of judgments opening proceedings: those judgments have the same effects – without any formalities – in any other EU Member States as they do under the law of the EU Member State of the opening proceedings. Therefore, Hungarian courts would enforce orders of a competent court of one EU Member State handed down in the course of an insolvency proceeding pursued under the Regulation.
If real estate located in Hungary and/or a substantive right attached to the real estate is the subject of the proceeding, the jurisdiction of the Hungarian court is exclusive. Consequently a decision on such matter reached by a foreign court is not valid under Hungarian law, and so cannot be enforced.
(d) Has your country adopted any procedures (such as the Model Law on Cross-Border Insolvency) to address the various issues that arise in dealing with cases of cross-border insolvency?
No. We do not have any special procedures dealing with cross-border insolvency other than the conflict rules of international private law. As to EU insolvency proceedings, the Regulation provides that the laws of the EU Member State opening the insolvency proceedings determine the conditions of the opening, conduct and closure of the proceedings.
