EBRD Law in Transition addresses developments in restructuring and insolvency

By Nibal Zgheib

Insolvency and restructuring are the focus of this year’s edition of Law in Transition online, a journal published by the EBRD’s Legal Transition team. The latest publication highlights the importance of insolvency regimes and restructuring for firms in times of transition and turmoil.

The publication was launched at the EBRD’s headquarters in London on Friday 7 November. The event was attended by high-level representatives of the International Monetary Fund and the World Bank Group and policy-makers from 17 countries.

During the event Catherine Bridge, EBRD Principal Counsel for debt restructuring and insolvency, presented the findings of the EBRD’s recent assessment of the insolvency office holder profession. “This assessment represents the first time that comparative research into the profession has been done on such an extensive scale. It identifies a clear link between the regulatory structure for insolvency office holders and the performance and relative development of the profession,” she said.

Since the financial crisis that swept across Europe in 2008, insolvency procedures have significantly improved in some countries of south-eastern Europe, although these changes take time and the outcome is unpredictable. Croatia, Montenegro, Serbia and Slovenia have all progressed with legal reforms that encourage business restructuring.

Slovenia adopted significant amendments to its insolvency framework late last year that will enable quicker and more efficient restructuring of companies in financial difficulties.

In March 2014, the European Commission issued recommendations to European Union (EU) Member States, seeking to prevent insolvency by encouraging the availability of a preventative restructuring framework in all Member States that satisfies certain minimum standards.

Moreover, in planned changes to the European Union Insolvency Regulation, the EU will make it obligatory for member countries to publish key information about insolvency proceedings in electronic insolvency registers.

The EBRD’s Assessment of Insolvency Office Holders looks at the Russian insolvency portal, the “Unified Federal Register of Bankruptcy Information” and how it compares to other national portals.

In the Middle East and North Africa (MENA) region, the establishment and implementation of insolvency regimes has not been an easy task. The latest Law in Transition online examines how strong insolvency laws could be an effective tool for promoting entrepreneurship, helping to reduce the risk that business owners face in case of failure and addressing unemployment in MENA.

Read the “Assessment of Insolvency Office Holders”.