If the liquidator fails to provide an individual notice to a known creditor in the manner prescribed by law, the known creditor will not be barred from exercising its right, even if it has not filed a claim within the deadline specified in the notice on the commencement of liquidation.

1. Commencement of Liquidation and Notification of Creditors

The liquidation of a company is commenced by a decision on the commencement of liquidation. Formally and legally, liquidation begins on the date on which the relevant decision is registered and the notice on the commencement of liquidation is published on the website of the Business Registers Agency’s Register of Business Entities (“Register”). The purpose of publishing the notice on the commencement of liquidation on the Register’s website is to notify unknown creditors of this proceeding.

In addition, the Companies Act (“Act”) prescribes an obligation to individually notify known creditors. Namely, the liquidator is required, within 15 days from the date of commencement of liquidation, to send written notice of the commencement of liquidation to the known creditors of the company in liquidation. The Act further prescribes the content of such notice, which must contain:

• information on the date of publication and the period during which the notice on the commencement of liquidation will remain published,
• the company’s registered office address, or the address for receipt of postal items, to which the creditor is to submit its claim, and
• a warning that the creditor’s claim will be barred if the creditor fails to file it within 120 days from the date of publication of the notice on the commencement of liquidation.

The publication of the notice on the commencement of liquidation, together with the individual notification, ensures that all creditors of the company in liquidation are fully informed.

• Filing of Claims and Legal Consequences of Failure to File a Claim

In accordance with the warning contained in the notice and the individual notification, if a creditor of a company in liquidation fails to file its claim within 120 days from the date of publication of the notice, the claim will be deemed barred (the creditor loses its right to the claim), and the company in liquidation will therefore not be required to settle that creditor’s claim. However, this does not apply to creditors whose claims have been established by an enforceable instrument, nor to creditors in respect of whose claims litigation against the company has commenced before the commencement of liquidation. These creditors are not required to file their claims, and their claims are deemed to have been filed. Likewise, creditors whose claims arose after the commencement of liquidation are not required to file their claim

Furthermore, when it comes to the barring of claims, there is no doubt that a creditor who has been individually notified of the commencement of liquidation will be barred from exercising its claim if it fails to file the claim in a timely manner. Likewise, there is no doubt that the creditor will also be barred if it fails to file a claim and the liquidator was unaware of its claim. However, the question arises as to whether a creditor of a company in liquidation may be barred from exercising its claim due to failure to file a claim if it was not individually notified of the commencement of liquidation and warned of the possibility of its claim being barred, even though the liquidator was aware of its claim.

Guided by the principle of good faith and fair dealing, it cannot be accepted that such a creditor should bear the consequences of the barring of its claim. In this regard, case law has consistently taken the same position[VP1] , confirming that, under such circumstances, there are no grounds for applying the rules on the barring of claims. Consequently, if the liquidator fails to provide individual notice to a known creditor in the manner prescribed by the Act, the known creditor will not be barred from exercising its claim even if it has failed to file the claim within the deadline specified in the notice on the commencement of liquidation.

In practice, determining whether a particular creditor is “known” to the company in liquidation depends on the circumstances of each individual case. Nevertheless, the basis for such a determination will most often be found in the business records of the company in liquidation itself. Namely, under the Accounting Act, companies are required to properly maintain records of all accounting documents, and precisely such records constitute key evidence as to whether a creditor was known at the time of commencement of liquidation.

• Potential Criminal Liability of the Liquidator

After all creditors have been paid, the liquidator is required to prepare and submit to the founder for adoption, among other things, a written statement confirming that individual notices have been sent to all known creditors. In this regard, it is important to bear in mind the provisions of the Act prescribing the criminal liability of the liquidator.

Namely, a liquidator who makes a written statement containing untrue information, where such statement is prescribed by the Act as a condition for carrying out a particular proceeding, with the intention of initiating and/or conducting and/or completing such proceeding, shall be punished by imprisonment for a term of six months to five years and a fine. Additionally, if the criminal offense in question is committed with the intent to cause harm to creditors or members of the company, and the amount by which such persons or entities have been harmed exceeds ten million dinars, the Act provides for a more severe sanction—imprisonment for a term of one to ten years and a fine.

In conclusion, the legislator clearly indicates that failure to comply with statutory obligations in liquidation proceedings has legal consequences, reflected in the potential criminal liability of the liquidator and the non-application of the rules on the barring of claims.