In its recent decision in re WL Vinohradská, the Czech Supreme Court answered the question about the make-up of classes of unsecured creditors in a reorganization plan and whether the debtor may group unsecured creditors into more classes. The court took a restrictive view of the issue, holding (at para. 31) that unsecured creditors must in principle be put into a single class. Exceptions are possible, but they must be based on heterogeneity of the unsecured creditors’ commercial interests, not on differences between the legal titles of their claims. Procedurally, WL Vinohradská is interesting because the Supreme Court handed the special appellate decision down after the insolvency proceedings have closed as the result of the first instance court having taken notice of the plan having been performed. Rather ominously, the Supreme Court noted that this has no impact on its decision on the special appeal. Because the special appeal failed, the comment was a mere footnote in the case at hand. However, the spectre of a quashing appellate decision handed down in respect of a fully performed reorganization plan did not go away – quite to the contrary, the court’s final comment (at para. 38) arguably made it stronger than ever before.

Decision No. 29 NSCR 109/2020 dated 31.05.2022 (in re WL Vinohradská)

Author: Tomáš Richter