On Thursday, 14th December, Serbian Parliament adopted amendments to the Bankruptcy Law with the view of improving collection for creditors, lower bankruptcy costs and shortening the bankruptcy procedure.
Creditors who have mortgages, as collateral, or other pledge rights on the assets of the insolvent debtor will now have the right to have one representative in the Creditors Committee, which has so far been reserved only for creditors that had no collateral on debtor’s assets.
The amendments also stipulate that certain actions in the bankruptcy procedure can only be undertaken with the consent of the creditor with the collateral, such as the leasing of mortgaged property or its sale without publicly disclosing it, which, until now, has been a discretionary right of the bankruptcy administrator.
There are novelties in the method of assessing the debtor’s assets which will be performed by the licensed appraiser, which, in turn, will increase legal safety for creditors, and expedite the process of cashing in the debtor’s assets based on market estimates.
A special rule is introduced where creditors now have the right to sell the mortgaged assets of the insolvent debtor in accordance with the mortgage sales rules. If the creditor fails to do so within a six-month-period, than the assets are returned to the bankruptcy administrator who is then going to try to sell them through bankruptcy proceedings.
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