Proceedings in the case on remuneration of insolvency procedure administrators from State resources has been terminated
The Constitutional Court has adopted a decision to terminate proceedings in the case No. 2009-100-03 “On Compliance of Section 28 of 11 December 2007 Cabinet Regulations No. 865 “Procedures for Covering Expenses and Remuneration of the Administrator in an Insolvency Procedure of a Legal Person from the Funds Allocated to the National Agency “Insolvency Administration” for these Purposes” with Article 1 and Article 105 of the Satversme (Constitution) of the Republic of Latvia”.
Article 1 of the Satversme provides that Latvia is an independent democratic republic, whilst Article 105 of the Satversme guarantees the property right.
The abovementioned regulation of the Cabinet of Ministers provides, among the rest things, that Insolvency Administration shall cover expenses and remuneration for the insolvency procedure administrator if it is not possible to pay remuneration for the administrator using the funds of the insolvent enterprise. From December 2008, the amount of remuneration in such cases constituted up to 1100 lats, however, on 21 April 2009 these regulations were amended by reducing the remuneration by 400 lats, whilst this reduction is not applied only to those administrators who have submitted to the Insolvency Administration an application regarding covering of remuneration before April 30 of this year. The applicant Valdis Kronis maintained that he had the right to confide that in the particular insolvency procedure initiated before 21 April he would receive remuneration of at least 1100 lats.
The Constitutional Court indicated that the Cabinet of Ministers Regulation was issued in accordance with the Insolvency Law. However, the law provides both, before and after adoption of the contested norm that the amount of remuneration for the administrator shall depend on the total amount of State tax contributions regarding enterprise risk and possibilities of the State budget. The Law has never conferred to administrators any right to confide in the fact (neither in the meaning of Article 105 of the Satversme, nor in the meaning of the principle of legal security) that he or she would receive remuneration of a certain amount. Moreover, the particular insolvency procedure indicated by the applicant has not yet been finished at the moment of adoption of the contested norm; therefore at that moment (before termination of the procedure) the applicant was not conferred the right to receive a particular remuneration for administration of the process.
Consequently, the Constitutional Court concluded that the contested norm does not infringe the property right of the applicant and that the proceedings shall be terminated.
The Judgment of the Constitutional Court is final and not subject to appeal.
Linked case: 2009-100-03