A Case initiated on the Completion of Insolvency Proceedings
On 14 December 2012 the 2nd Panel of the Constitutional Court initiated case “On Compliance of Section 138 of the Insolvency Law of 1 November 2007 with Article 92 and Article 105 of the Satversme of the Republic of Latvia.”
Contested Norm
The contested norm was in force until 1 November 2010. It provided that the decision on the completion of the bankruptcy proceedings was adopted by the creditors’ meeting within a month after performing the measures of the bankruptcy proceedings. The decision on the completion of bankruptcy proceedings is adopted, if at least half of the creditors having the right to vote, who are present, vote for it.
Norm of Higher Legal Force
Article 92 of the Satversme: “Everyone has the right to defend his or her rights and lawful interests in a fair court. Everyone shall be presumed innocent until his or her guilt has been established in accordance with law. Everyone, where his or her rights are violated without basis, has a right to commensurate compensation. Everyone has a right to the assistance of counsel.”
Article 105 of the Satversme: “Everyone has the right to own property. Property shall not be used contrary to the interests of the public. Property rights may be restricted only in accordance with law. Expropriation of property for public purposes shall be allowed only in exceptional cases on the basis of a specific law and in return for fair compensation.”
The Facts
The Applicant AS “Danske Banka” indicates that it was recognised as a creditor in insolvency proceedings by a general jurisdiction court. However, the contested norm, allegedly allows completing the case of insolvency proceedings and to disregard the Applicant’s right, even though a dispute still exists regarding the scope of rights of the potential creditor vis-à-vis the insolvent person, i.e., in other legal proceedings of the claim there is still an unexamined dispute concerning the Applicant’s as a potential creditor’s scope of rights vis-à-vis the insolvent person.
The Legal Proceedings
The Constitutional Court has asked the Saeima to submit a reply on the facts of the case and legal substantiation by 14 February 2013.
The term for preparing the case is 12 May 2013.
Linked case: 2012-25-01