• Bulgarian legislator introduces new preventative restructuring mechanism
  • April 2, 2017 | Author: Angel A. Ganev
  • Law Firm: Djingov, Gouginski, Kyutchukov & Velichkov - Sofia Office
  • The Bulgarian Parliament has recently adopted important amendments to the Law on Commerce, establishing, among others, a completely new tool for early restructuring for traders and commercial enterprises in financial distress – the so-called “business stabilization procedure”. The amendments concerning the stabilization procedure will become effective as of1July 2017. The new procedure has been adopted as a result of the recommendations of the European Commission and the Council of the European Union for adoption of expedited debt restructuring and second chance frameworks, as well as of a reaction to the critics that Bulgaria has so far been the only EU Member state whose legislation does not provide a nearly restructuring tool. The purpose of the stabilization procedure is to create a viable option for traders and commercial enterprises that are not insolvent, but the danger of insolvency is imminent, to achieve restructuring and, where possible, partial discharge of debts and prevention of insolvency.