Standardised method of reporting insolvency rankings

National insolvency ranking[1]

Member State: Czech Republic

(as of 31 May 2021)

Rank[2] Name Description Legal basis Comments
1 receivables of the partners or members of the debtor arising from their participation in a company or cooperative claims arising from the ownership of Common Equity Tier 1 instruments[3] Article 172(3), second sentence of the Insolvency Act[4] Pursuant to the second sentence of Article 172 (3) of the Insolvency Act, the receivables of the partners or members of the debtor arising from their participation in a company or in a cooperative shall always be satisfied last and on a pro rata basis.
2 claims arising from the ownership of Additional Tier 1 instruments[5]   Article 172(1) and (2) of the Insolvency Act, Article 52(1)(d) of CRR[6] Under the Insolvency Act, the receivables listed here in classes 2 to 4 are included in one class of subordinated claims. However, due to the requirements of CRR that the claims arising from the ownership of Additional Tier 1 instruments be satisfied only after the claims arising from the ownership of Tier 2 instruments, the CNB has decided to divide them into separate classes.
3 claims arising from the ownership of Tier 2 instruments[7]   Article 172(1) and (2) of the Insolvency Act, Article 63(f) of CRR  
4 subordinated claims receivables which, pursuant to the agreement, are to be satisfied only after the satisfaction of another receivable or other receivables of the debtor, especially if a decision on the debtor’s insolvency is issued (a receivable from a subordinated bond shall also be deemed a subordinated claim pursuant to Act No. 190/2004 Coll., on Bonds, as amended Article 172(1) and (2), first sentence, Article 172(3) of the Insolvency Act Subordinated claims shall be satisfied depending on the agreed or set level of their subordination; otherwise they shall be satisfied pro rata.
5 receivables from non-preferred debt instruments receivables arising from a debt instrument, provided that debt instrument

a) has the original contractual maturity of at least one year,

b) does not contain an embedded derivative and is not itself a derivative and

c) the contractual documentation and prospectus of the security, if drawn up, shall indicate the order of satisfaction of the claim under Article 374b(1) of the Insolvency Act

Article 374b of the Insolvency Act Pursuant to Article 374b(3) of the Insolvency Act, a debt instrument is a bond and other form of transferable debt and an instrument which generates or recognises a debt.
6 common (senior) claims all non-subordinated, unsecured (or considered unsecured) and non-preferential claims under the provisions of the Insolvency Act Articles 165(1) and 167(3) of the Insolvency Act  
7 insured receivables from deposits exceeding the insurance limit pursuant to the Act on Banks[8] receivables

a) from the part of deposits of natural persons and small and medium-sized enterprises[9] exceeding the insurance limit pursuant to Article 41e(2) of the Act on Banks,

b) from the deposits of natural persons and small and medium-sized enterprises that would be insured deposits within the meaning of Article 41c of the Act on Banks if they were not received through a branch in a State that is not a Member State of the European Union or of the European Economic Area

Article 374(1) (a) and (b) of the Insolvency Act  
8 insured receivables from deposits up to the maximum amount of compensation pursuant to the Act on Banks

 

 

receivables

a) from the deposits up to the maximum amount of compensation pursuant to Article 41e(2) of the Act on Banks, and

b) of the Financial Market Guarantee System established pursuant to Article 41h(2) of the Act on Banks or pursuant to Article 221(6) of the Insolvency Act

Article 374(1) (c) and (d) of the Insolvency Act  
9 claims of creditors of secured claims in the amount determined in the valuation of the collateral receivables secured by property belonging to the assets only through a lien, a retention right, a limitation on property transfer, title transfer collateral arrangement or by assignment of the claim by way of collateral or a similar right pursuant to foreign law, including secured future and contingent receivables Article 2(g) of the Insolvency Act, Article 167(1) and (3) of the Insolvency Act, Article 298 of the Insolvency Act and Article 173(3) of the Insolvency Act  
10 claims of creditors against assets seized in criminal proceedings enforceable receivables for payment of compensation for damage or non-proprietary loss caused by a criminal offence or surrender unjust enrichment obtained through criminal activity Article 167(2) of the Insolvency Act The time of origin of the collateral is decisive for the order of satisfaction in this class pursuant to the Criminal Procedure Code.
11 preferential claims, i.e. claims on assets and claims of equal status to claims on assets claims on assets (see Article 168 of the Insolvency Act), claims of equal status to claims on assets (see Articles 169 and 374a of the Insolvency Act) Articles 168, 169 and 374a of the Insolvency Act Pursuant to Article 374a of the Insolvency Act, the CNB’s claims arising from loans provided to a liable entity pursuant to the Recovery and Resolution Act and claims arising from an entitlement to the reimbursement of any costs incurred by the CNB in connection with the application of resolution measures pursuant to the Recovery and Resolution Act are claims of equal status to claims on assets.
12        
13        
14        
15        
16        
17        
18        
19        
20        

[1] This is an unofficial translation. Please refer to the original Czech version of this document for the legally binding version.

[2] The ranking starts with the lowest priority ranking instruments and items. If there are less than 20 different insolvency rankings in the jurisdiction, the rows corresponding to the non-existent insolvency rankings shall be left empty.

[3] Article 2(2)(h) of Act. No. 374/2015 Coll., on Recovery and Resolution in the Financial Market, as amended (hereinafter the “ Recovery and Resolution Act”).

[4] Act No. 182/2006 Coll., on Insolvency and Methods of its Resolution (Insolvency Act), as amended.

[5] Article 2(2)(i) of the Recovery and Resolution Act.

[6] Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012, as amended.

[7] Article (2)(1)(j) of the Recovery and Resolution Act.

[8] Act No. 21/1992 Coll., on Banks, as amended.

[9] Article 2(1) of Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises, OJ L 124, 20. 5. 2003, p. 36.