The Serbian government is going to discuss the amendments to the Bankruptcy Law soon with the goal of helping creditors to settle their claims in a faster and more efficient manner.
In Serbia, creditors usually settle 40.7% of their claims from business partners which have declared bankruptcy even if the claim has a mortgage as collateral. This is one of the reasons why the government has decided to improve the Bankruptcy Law. The draft amendments were written late last year, and the government will discuss them soon.
The International Monetary Fund has been appealing to the Serbian government for years to have a more efficient bankruptcy procedure. The new amendments will benefit bankers and other financiers who had mortgages as collateral, and they will now be able to settle their claims in a much faster manner. If, for instance, a bankrupt company is sold as a legal entity or its entire assets have been put up for sale, the creditors who have a collateral on any of the debtor’s assets will be given an advantage in settling their claims. The second goal of the amendments is to have a faster bankruptcy or reorganization procedure.
“In practical implementation of the current legislation we have noticed several problems that mostly affected creditors. The new solutions will make it possible for bankruptcy to be beneficial both to the company that is declaring it and to creditors. If that is not possible, then the bankrupt companies have to settle its liabilities towards creditors first or sell their assets to another company that it will make them functional. The amendments to the Bankruptcy Law stipulate creditors having a more active role in the decision making process relating to their claims. Also, the procedure relating to selling the bankrupt company’s assets will be improved”, the Ministry of Economy says.
Furthermore, the amendments to the Bankruptcy Law stipulate that if a bankruptcy administrator decides to lease out the business premises of the bankrupt company, he would have to ask for permission from the creditors to do so. The same applies to the sale of assets via a direct bargain, providing that the assets have not been offered for sale publicly beforehand.
(Vecernje Novosti, 02.08.2017)
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