Draft Terms of Demerger and Public Notice to Creditors
The demerger process begins with the draft terms of demerger prepared by the Boards of Directors of the companies involved in the demerger, which must be submitted to the Trade Register for registration within one month of signature. The draft terms shall be accompanied by an auditor’s statement containing the grounds for determining the demerger consideration and the distribution of the demerger consideration. In regard to the acquiring companies, such a statement shall also indicate whether the demerger may compromise the repayment of the acquiring companies’ debts.
The demerging company, and in some cases the acquiring company, shall submit an application to the Board of Patents and Registration regarding a public notice to the company’s creditors. In certain situations the creditors may object to the demerger, and the demerger may lapse. A company can suspend the expiration proceedings by demonstrating that it has brought an action for an affirmation by the court regarding receipt by the creditor of either payment or full security for its receivables.