Abstract

This article concerns the notion of insolvency laid down in Art. 10 of the Bankruptcy and Reorganisation Act of 28 February 2003. This notion is developed on Art. 11 of the Bankruptcy and Reorganisation Law, which is commonly interpreted as containing a definition of the notion of insolvency. This article outlines the new interpretation which argues that Art. 11 of the Bankruptcy and Reorganisation Law does not provide a definition but merely describes the facts on the basis of which the debtor is presumed insolvent. Consequently, defining of insolvency becomes an interpretational challenge for the doctrine. The article introduces a teleological definition of insolvency which provides that insolvency may taken on two forms – no liquidity and anticipated loss of liquidity, which correspond with two presumptions of insolvency specified in Art. 11 of the Bankruptcy and Reorganisation Law. Apart from that, the article critically analyses planned changes to the said provisions which are to be introduced by the new Restructuring Act. In author’s opinion, if interpreted in a manner presented in the article Art. 10 and 11 of the Bankruptcy and Reorganisation Law in its present form better fulfil their function than in the wording they are to assume after the planned changes will have been introduced.