The Ministry of Economy in cooperation with the International Finance Corporation – IFC (World Bank Group) has drafted an Insolvency law.
According to the Ministry of Economy, the purpose of the adoption of this Insolvency Law is to establish a solid and efficient insolvency system, by improving the insolvency regulatory framework, and especially to encourage companies with difficulties to try to negotiate temporary debt relief and to negotiate the terms of out-of-court debt settlement through an appropriate insolvency mechanism.
The Ministry of Economy believes that the drafting of the Insolvency Law will enable protection of investors and their businesses, more flexible and simpler procedure for small businesses, clarification of the conditions for the participation of creditors in bankruptcy proceedings. The new law also provides provisions for a timely restructuring of companies with difficulties in order for the debtor to negotiate debt settlement options with his creditors.
The new law envisages harmonization with: – Directive 2019/1023 of the European Parliament and of the Council of 20.06.2019, especially in the part on the framework for preventive restructuring, debt relief and disqualifications and measures to increase the efficiency of the procedures related to restructuring, insolvency and debt relief and Amendments to EU Directive 2017/1132 on restructuring and insolvency.
The purpose of the adoption of Directive 2019/1023 of the European Parliament and the Council of 20.06.2019 is to contribute to the proper functioning of the internal market and the removal of obstacles to the exercise of fundamental freedoms such as free movement of capital and freedom of establishment, and which most often occur due to differences between national laws and procedures governing the preventive restructuring of indebtedness, insolvency, relief from indebtedness on a legal basis, a transformation of indebtedness. Therefore, the new Draft Insolvency Law envisages harmonization of the Directive, in order to simplify and concretize certain procedures.
The set time frame for preparation of this Draft Insolvency Law is from 11.02.2021 to 30.04.2021, and no public hearing has been announced for it.
It is expected that the new Draft Insolvency Law will establish a specific legal framework, where in the same place an efficient insolvency system will be regulated comprehensively.