Received: 2019-03-15  |  Accepted: 2019-11-10  |  Published: 2019-12-15

Title

Consideration of the effectiveness of flat-rate compensation for damage in insolvency proceedings


Abstract

Damage to property is a socially undesirable phenomenon that also occurs in insolvency proceedings. The parties involved in such proceedings do not comply with their obligations under the applicable law due to different motives. Such misconduct not only undermines the proper performance of insolvency proceedings, but also threatens or violates the property integrity of another party, especially creditors. This article analyses the importance of flat-rate compensation for damage and the extent of its preventive effect on parties who consider and weigh the effects of their possibly unlawful conduct when they are aware of the amount of monetary compensation for immaterial damage that will have to be provided to the injured party in the event of their breach of an obligation imposed or stipulated by law. Although the Act on Bankruptcy and Restructuring does not regulate flat-rate compensations for damage; we analyse the purpose pursued by legislators, considering the fact that such compensation is laid down in several laws valid and effective on the territory of the Slovak Republic, and we provide supporting arguments favouring the idea to introduce flat-rate compensations for damage also in insolvency proceedings, as this can reduce the rate of offences related to the insolvency of the bankrupt.


Keywords

insolvency, compensation for damage, flat-rate, prevention, persuasive methods of action


JEL classifications

K14


URI

http://jssidoi.org/jesi/article/448


DOI


Pages

1435-1449


Funding

This research was supported by the project “Guidelines and tools for effective elimination of unlawful acts in relation with potential insolvency”, which has received funding from the Slovak Research and Development Agency under the contract No. APVV-15-0740.

This is an open access issue and all published articles are licensed under a
Creative Commons Attribution 4.0 International License

Authors

Čentéš, Jozef
Comenius University in Bratislava, Bratislava, Slovakia https://uniba.sk
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Krajčovič, Michal
Comenius University in Bratislava, Bratislava, Slovakia https://uniba.sk
Michal Mrva - advokátska kancelária, s. r. o., Bratislava, Slovakia
Articles by this author in: CrossRef |  Google Scholar

Journal title

Entrepreneurship and Sustainability Issues

Volume

7


Number

2


Issue date

December 2019


Issue DOI


ISSN

ISSN 2345-0282 (online)


Publisher

VšĮ Entrepreneurship and Sustainability Center, Vilnius, Lithuania

Cited

Google Scholar

Article views & downloads

HTML views: 989  |  PDF downloads: 465

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