Insolvency Law at Burundi
In Burundi, insolvency law is primarily governed by the Uniform Act on the Organization of Collective Proceedings for Wiping Off Debts, which is part of the OHADA (Organisation pour l'Harmonisation en Afrique du Droit des Affaires) framework. Burundi is a member of OHADA, an organization aimed at harmonizing business laws across many African countries.
Key Features of Insolvency Law in Burundi under OHADA:
Types of Proceedings:
Preventive Settlement (Règlement Préventif): Aims to help a business in difficulty to avoid insolvency.
Judicial Reorganization (Redressement Judiciaire): Seeks to allow a company to continue operating and to restructure its debts.
Judicial Liquidation (Liquidation Judiciaire): Applies when a company can no longer be saved and its assets must be liquidated to pay creditors.
Jurisdiction:
The Commercial Court handles insolvency matters. Proceedings can be initiated by the debtor or a creditor.
Appointment of Administrators:
A court-appointed administrator (syndic or trustee) oversees the reorganization or liquidation process, ensuring fair treatment of creditors.
Creditor Rights:
Creditors must declare their claims within a legally defined timeframe.
Certain creditors, such as employees or secured creditors, may have preferential rights.
Protection Against Creditors:
Once insolvency proceedings begin, individual actions by creditors (such as lawsuits or seizures) are typically suspended.
Criminal Penalties:
Fraudulent bankruptcy or mismanagement may result in criminal sanctions against business owners or managers.
Recent Reforms:
The OHADA Uniform Act was revised in 2015, improving transparency, creditor protections, and procedures for reorganization.
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