In this master thesis I consider the simplified compulsory settlement procedure under the Slovenian Financial Operations, Insolvency Proceedings and Compulsory Winding-up Act (ZFPPIPP) through its specific regime, which causes a plethora of problems and uncertainties in practice. The simplified compulsory settlement procedure is an insolvency proceeding, which allows the smallest entities in Slovenia’s economy (micro companies and sole entrepreneurs) to restructure more simply and at a lesser cost, without the need for excessive rigidness and formalisms. It is due to this fact that certain rules, which in the regular compulsory settlement proceeding protect the interests and rights of creditors, are reduced in the simplified compulsory settlement proceeding – there is no registration and testing of claims, no administrator, no creditor’s committee, which in practice means a severe reduction in costs and simplification of the procedure for the insolvent debtor, yet in turn the necessary consequence is a reduced or even faulty supervision over the actions of the debtor. Only partial judicial supervision is ensured, which precisely because it is limited does not engender creditor’s confidence in the procedure.
The master thesis is divided into four parts. In the first part I elaborate the reasons for this proceeding being introduced, the second part is meant to introduce how the simplified compulsory settlement procedure takes place, with a special emphasis on the specifics (e.g. updated list of claims, non-consideration of the principle of absolute priority) and the misuses, which occur in practice. In the third part I include some statistical information and a brief analysis of data concerning the content of confirmed simplified compulsory settlement proceedings. In the fourth part I focus on the filing in of legal gaps pertaining to the relationship between the simplified compulsory settlement and bankruptcy proceeding.