LAWS TO WATCH: Bankruptcy Act
According to the proposed amendments, pre-bankruptcy settlements move from purview of the Financial Operations and Pre-Bankruptcy Settlement Act to the jurisdiction of the Bankruptcy Act.
The act introduces the exclusive jurisdiction of commercial courts for opening and managing pre-bankruptcy procedures. In the future, the Financial Agency (FINA), which has previously opened bankruptcy proceedings, will only technically and administratively assist the court.
State institutions will not be able to forgive its own debts, but will have to seek the opinion of the Ministry of Finance for each individual debt that it is seeking exemption.
The legislation reduces the duration of the procedure. The proceedings for the first instance court should be completed within 6 months, while on appeal to the appellate court requires the court to make a decision within one month. Trustees, instead of judges, will be chosen at random through a computer programme.
In case that the pre-bankruptcy settlement is accepted by a majority vote, 90% of debts will be recognised and 10% will be forgiven for those creditors who oppose the debt forgiveness plan.
Note: Public debate is open until 22 October 2014…