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Amendments to the general insolvency procedure

A big part of the changes envisioned by the Bill for an Act amending and supplementing the Commerce Act, approved with Decision No 755 of 11 October 2022 of the Council of Ministers, concern the general bankruptcy proceedings. The aim of the Bill is to introduce an accelerated and refined procedure, that could generally improve the legal regulation of the matter.

The proposed amendments seek to introduce clear criteria for the instituting of the bankruptcy proceedings by giving clearer legal definitions of the conditions under which the proceedings are instituted (Article 742, Para. 1 of the Commerce Act – “Over-indebtedness”); to achieve a fast, dynamic procedure by introducing general and explicit time limits in the proceedings and by providing for a limited duration in time of the proceedings in certain cases. Some changes are proposed in order to accelerate and facilitate the process during the presentment and the allowing of claims, which will help to reduce the administrative burden and to enforce some of the Acts of the European union (Article 693a, Article 685 of the Commerce Act).

A great improvement is the proposition to reduce the court fees for the revocatory actions and the costs for an account of the insolvency estate. The possibility to sell the assets from the insolvency estate via electronic public tender is also introduced – that could significantly increase the efficiency of the process and ensure that it is dynamic and transparent. The Bill aims to improve the legal regulation of the activities of the trustees in bankruptcy as well by Increasing the criteria for the individuals that can act as trustees (Article 655, Para. 2 of the Commerce Act), but also by creating rules that will protect their rights (Article 657, Para. 2 and Article 663, Para. 1 of the Commerce Act).

The amendments in the Bill are directed not only to improve the insolvency procedure, but to make the legal regulation of the stabilization proceedings more efficient. The changes aim to clarify the purpose of the proceedings (to prevent the instituting of the bankruptcy proceedings), to synchronize its legal regulation with the Acts of the European union, to introduce clear rules for preparing a stabilization plan and etc.

The clearer regulation of the bankruptcy proceedings, proposed by the Bill, could generally relieve the traders. The Bill, already submitted at first session before the National Assembly, is to be revisited on subsequent readings.

The news above is for information purposes only. It is not a (binding) legal advice. For a thorough understanding of the subjects covered and prior acting on any issue discussed we kindly recommend Readers consult Ilieva, Voutcheva & Co. Law Firm attorneys at law.