Clifford Chance
The balance sheet test strikes back
15 November 2011
In 2009, as part of a set of "anti-crisis" amendments to the Czech Insolvency Act, the Czech Parliament relieved debtors of the obligation to commence insolvency proceedings on the grounds of the balance sheet test of insolvency. The relief was temporary, however, and will expire in 2012.
The Czech Insolvency Act 182/2006 brought back to life, with effect from January 2008, the balance sheet test of insolvency. The test has existed in Czech insolvency law since its reintroduction in 1991, however, in the period between 1996 and 2007, it was watered down to basically just a duplicate of the cash flow test.
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