Insolvency Law at Serbia
Serbia's insolvency framework is primarily governed by the Law on Bankruptcy, which delineates the procedures for both liquidation and reorganization of insolvent entities. Recent amendments have introduced significant reforms aimed at enhancing the efficiency and transparency of bankruptcy proceedings. (The Petition for Initiating Bankruptcy Proceedings - D. Djordjevic, attorney)
⚖️ Legal Framework
Law on Bankruptcy: The principal legislation governing insolvency proceedings in Serbia.
Recent Amendments: Recent legislative changes have introduced reforms to improve the efficiency and transparency of bankruptcy proceedings.
⚙️ Key Features of Bankruptcy Proceedings
1. Initiation of Bankruptcy Proceedings
Petitioners: Bankruptcy proceedings can be initiated by the debtor, creditors, or the liquidator. (The Petition for Initiating Bankruptcy Proceedings - D. Djordjevic, attorney)
Grounds for Filing: A debtor is considered insolvent if it is unable to pay its debts within 45 days of the due date or has ceased all payments for a consecutive period of 30 days. (The Petition for Initiating Bankruptcy Proceedings - D. Djordjevic, attorney)
2. Types of Bankruptcy Procedures
Liquidation: Involves the sale of the debtor's assets to satisfy creditor claims.
Reorganization: Entails restructuring the debtor's obligations and operations to restore solvency. (Key Features Of The New Insolvency Proceedings Rules In Serbia - Insolvency/Bankruptcy - Insolvency/Bankruptcy/Re-Structuring - Serbia)
3. Creditors' Committee and Assembly
Creditors' Committee: Participation is now open to all insolvency creditors, regardless of the amount of their claim, ensuring the protection of minority creditors' interests. (Key Features Of The New Insolvency Proceedings Rules In Serbia - Insolvency/Bankruptcy - Insolvency/Bankruptcy/Re-Structuring - Serbia)
Creditors' Assembly: The assembly's participation is based on the appraisal of security assets, which must be conducted by authorized persons and not be older than 12 months. (Key Features Of The New Insolvency Proceedings Rules In Serbia - Insolvency/Bankruptcy - Insolvency/Bankruptcy/Re-Structuring - Serbia)
4. Transparency and Public Access
Electronic Notice Board: The insolvency court maintains an electronic notice board for the publication of all court-rendered legal acts. (Key Features Of The New Insolvency Proceedings Rules In Serbia - Insolvency/Bankruptcy - Insolvency/Bankruptcy/Re-Structuring - Serbia)
Public Portal: A public portal is available for the publication of insolvency proceedings filings by all participants. (Key Features Of The New Insolvency Proceedings Rules In Serbia - Insolvency/Bankruptcy - Insolvency/Bankruptcy/Re-Structuring - Serbia)
Quarterly Reports: The agency authorized to keep a directory of insolvency receivers publishes the insolvency receiver's quarterly reports. (Key Features Of The New Insolvency Proceedings Rules In Serbia - Insolvency/Bankruptcy - Insolvency/Bankruptcy/Re-Structuring - Serbia)
5. Role and Powers of the Insolvency Receiver
Challenging Detrimental Actions: The insolvency receiver has a duty to challenge actions of the debtor that are to its detriment. If successful, the challenge will result in an increase in the value of the insolvency estate as challenged actions are rescinded. (Key Features Of The New Insolvency Proceedings Rules In Serbia - Insolvency/Bankruptcy - Insolvency/Bankruptcy/Re-Structuring - Serbia)
Collateralized Creditors: A new category of creditors, collateralized creditors, has been introduced. These creditors do not hold a monetary claim towards the debtor but are secured by a security interest provided by the debtor. (Key Features Of The New Insolvency Proceedings Rules In Serbia - Insolvency/Bankruptcy - Insolvency/Bankruptcy/Re-Structuring - Serbia)
6. Reorganization Plan
Content Requirements: The reorganization plan must include information about persons who are to become shareholders of the debtor, information about affiliated persons, and an appraisal of the debtor's property rendered within six months prior to submission of the plan. (Key Features Of The New Insolvency Proceedings Rules In Serbia - Insolvency/Bankruptcy - Insolvency/Bankruptcy/Re-Structuring - Serbia)
Independent Supervisor: An independent supervisor for the implementation of the reorganization plan may not be a person employed by the debtor or affiliated person. (Key Features Of The New Insolvency Proceedings Rules In Serbia - Insolvency/Bankruptcy - Insolvency/Bankruptcy/Re-Structuring - Serbia)
Voting Rights: Creditors with separation rights may not vote for the reorganization plan; however, the plan may not contain elements that would diminish their security interest. (Key Features Of The New Insolvency Proceedings Rules In Serbia - Insolvency/Bankruptcy - Insolvency/Bankruptcy/Re-Structuring - Serbia)
Competition Authorities' Opinion: The opinion of competition authorities is no longer required for the adoption of the reorganization plan if the debtor is classified as a small enterprise. (Key Features Of The New Insolvency Proceedings Rules In Serbia - Insolvency/Bankruptcy - Insolvency/Bankruptcy/Re-Structuring - Serbia)
7. Cross-Border Insolvency
Recognition of Foreign Proceedings: Serbia recognizes foreign insolvency proceedings based on the 1997 UNCITRAL Model Law on Cross-Border Insolvency. Foreign insolvency proceedings may have an effect in Serbia, enabling stays on proceedings and enforcement over a debtor's assets in Serbia and cross-border cooperation and coordination between courts and insolvency representatives. (Cross-Border Insolvency Under Serbian Law - Insolvency/Bankruptcy - Serbia)
🧭 Conclusion
Serbia's insolvency framework has undergone significant reforms aimed at enhancing the efficiency, transparency, and fairness of bankruptcy proceedings. The introduction of electronic platforms, broader creditor participation, and clearer roles for insolvency receivers contribute to a more robust and equitable system. These changes align Serbia's insolvency practices with international standards, providing a more predictable environment for both domestic and foreign creditors. (Draft of the Law on Amendments to the Bankruptcy Law - Effects of Proposed Changes on Bankruptcy Procedure)
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