Avoidance action in the Czech Republic: fees and costs
A foreign owner's Czech subsidiary made a payment eighteen months before a supplier's insolvency was declared. The insolvency administrator now claims that payment disadvantaged other creditors and asks for it back. The owner who approved the transfer has a short window to decide whether to contest the claim, negotiate, or accept it.
An avoidance action (odporovatelnost) is how a Czech insolvency administrator recovers value transferred out of the debtor's estate before insolvency proceedings opened. Czech insolvency legislation ties the claim to a fixed look-back period counted back from the date the insolvency petition was filed, and the action is decided by the insolvency court handling the main proceeding, not by a separate civil suit.
This page sets out who may bring the claim and against whom, the deadline that runs against it, the document set a defence needs to assemble, and the point at which contesting no longer makes practical sense.
What is an avoidance action, and what does it target?
An avoidance action lets the administrator undo the effect of a transaction the debtor completed before the insolvency petition, where that transaction reduced what remained for creditors. It does not target the underlying contract as such; it makes the transferred value, or its equivalent, recoverable into the insolvency estate.
The claim runs against whoever received the benefit – a supplier paid in full while others waited, a related company that received a loan repayment, a bank that took fresh security on old debt. Czech insolvency legislation separates transactions made without adequate consideration, transactions with persons related to the debtor, and transactions that preferred one creditor over the rest that would otherwise have shared the estate pro rata. Each category carries its own look-back period and its own standard of what the recipient is presumed to have known.
For a director who authorised the payment, the same file often opens a second question – whether continuing to pay one creditor while insolvency approached exposes that director personally. That question is addressed on the page on directors' duties near insolvency, and it runs on a separate track from the avoidance action itself.
When does a transaction qualify for avoidance?
A transaction qualifies when it falls inside the look-back period fixed to the petition date, and either the debtor was already unable to pay its debts as they fell due or the transaction itself brought that state about. For related parties, the look-back period is longer and the recipient is presumed to have known of the debtor's position unless it shows otherwise.
Once the petition is filed, that date is fixed. A transaction inside the look-back window is not open to re-characterisation by a later restructuring plan or a subsequent settlement between the parties – the passage of time after filing closes the route to argue that the transaction should be judged by conditions that applied later.
An intercompany repayment in the low six figures was clawed back in full after the administrator showed the related-party look-back period applied, in a regional insolvency proceeding where the parties had treated the repayment as routine (winter 2025).
The look-back period is measured from the petition, not from when either party first noticed the transaction was in question.
A repayment made to a related party rarely looks suspicious at the time it is made; the look-back period is what turns it into a claim a year or more later. LISTINA reports which look-back period applies to a specific transaction and what the insolvency register shows about the petition date, delivered within an agreed range of working days; write to info@listinafirm.com or use the contact page. Representation, if the matter reaches a hearing, is provided by a collaborating advocate.
What is the route, and what is the deadline?
The administrator files the avoidance action before the insolvency court already seized of the main proceeding, not as a fresh civil suit in a different venue. The recipient is served and given a fixed period to respond; if no defence is filed, the court decides on the administrator's version of the file.
Where the recipient sits outside the Czech Republic, service and any request for interim protection of assets follow the cross-border rules that apply to insolvency-adjacent proceedings within the EU; the mechanics of that route, including how interim relief is sought across a border, are set out separately on the page on interim relief across borders.
The claim, once filed, is recorded on the insolvency register; the register keeps the entry regardless of how the dispute is later resolved, and it does not disappear merely because a settlement is under discussion.
What must the file contain?
A defence against an avoidance action stands or falls on documents that establish the date, the value, and the context of the disputed transaction – not on argument about fairness in the abstract.
- the contract or invoice evidencing the transaction and its stated value
- proof of the actual payment date, not merely the invoice date
- corporate records showing any relationship between the parties, where a related-party category is at issue
- the debtor's financial position at the time of the transaction, to the extent it can be reconstructed from filed accounts or the insolvency register
- correspondence around the transaction, particularly anything showing why it was made when it was
- an extract from the insolvency register confirming the petition date, which fixes the look-back window
- transaction inside the look-back window, no related-party link – gather payment and contract records – recipient assembles the file – within the response period set by the court
- transaction with a related party – add corporate structure records – recipient rebuts the presumption of knowledge – same response period, heavier evidentiary load
- transaction already conceded as preferential – assess settlement terms – recipient and administrator negotiate – before the hearing date is fixed
A German supplier reconstructed the debtor's asset and payment record before the administrator's claim was filed, and settled the resulting dispute roughly four months faster than the proceeding's standard calendar would have allowed (autumn 2025).
The register extract that fixes the petition date is often the single document that decides which look-back period applies.
Assembling the document set after the response period has started rarely leaves enough time to do it properly. LISTINA produces a factual report on the transaction, the applicable look-back period, and the current state of the insolvency register, delivered within an agreed range of working days; write to info@listinafirm.com. Representation before the insolvency court, where needed, is provided by a collaborating advocate.
Act, wait, or stop: what should the counterparty do now?
Once notice of an avoidance action arrives, there are three positions: contest it with the document set assembled above, negotiate a settlement before the hearing, or accept the claim where the look-back period and the value plainly apply.
Waiting without a decision is not a neutral position. Where a director authorised the payment while aware of the debtor's approaching insolvency, personal liability toward the creditors can attach independently of the outcome of the avoidance action itself, and that exposure does not wait for the main claim to be resolved first.
Before the matter starts, documents and registers can show the transaction date, the value, and the petition date. They cannot show what the recipient actually knew at the time, whether the administrator will pursue the claim to judgment rather than settle, or how a court will weigh a borderline related-party link. Those are judgments the file does not answer on its own.
Frequently asked questions
Who may file an avoidance action?
Only the insolvency administrator appointed in the debtor's insolvency proceeding may bring an avoidance action. A creditor cannot file it directly; a creditor who believes a transaction should be avoided raises it with the administrator, who decides whether to act.
What is filed with it?
The administrator files the claim together with the documents supporting the disputed transaction's date, value, and the relationship, if any, between debtor and recipient. The recipient then files its own response with supporting records within the period the court sets.
What is the deadline?
The look-back period is fixed to the date the insolvency petition was filed, and the response period after service is short. A late response is treated as no defence at all, so the deadline is worth confirming as soon as notice arrives rather than after preparing the substance.
Why is it rejected?
Claims are rejected when the transaction falls outside the applicable look-back period, when the debtor was not yet in a state that the law recognises as insolvency at the relevant date, or when the recipient shows it neither knew nor should have known of the debtor's position.
LISTINA produces factual reports from documents and public registers. It does not provide legal advice and does not represent parties. Where a matter requires representation before a Czech court or authority, it is handled by a collaborating advocate.
A transaction that looked routine at the time is the one an administrator reopens once the insolvency register shows the petition date it falls inside. LISTINA sets out the look-back period that applies to a specific transaction and the state of the file that supports or undermines it, delivered within an agreed range of working days; write to info@listinafirm.com. Representation, if the matter reaches a hearing, is provided by a collaborating advocate.