Business News

Insolvency Proceedings to Be Made More Efficient

Ljubljana, 10 March (STA) - A blueprint of changes to legislation regulating insolvency proceedings unveiled by the Justice Ministry on Wednesday aims to make proceedings more efficient by giving district courts universal jurisdiction in bankruptcy proceedings.

Amendments to the financial operations, insolvency proceedings and compulsory dissolution act also envisages a chamber of official receivers, whose membership would be obligatory.

Justice Ministry State Secretary Bostjan Skrlec said the solution would guarantee better quality and oversight of receivers' work. Those wanting to obtain a licence will have to have served at least two years' apprenticeship.

The changes specify in greater detail receivers' bonuses. "The services the official receiver is eligible to charge extra are clearly defined as are those in the scope of his duties," Skrlec said, adding that this would make bonuses more transparent and protect bankruptcy assets.

Universal jurisdiction for bankruptcy proceedings at district courts would considerably disburden local courts in execution proceedings and at the same time increase the efficiency of insolvency proceedings, Skrlec said.

Due to criticism that courts have been applying different practice in deciding about legal means in insolvency proceedings, the ministry is proposing delegating second-instance cases to the Ljubljana District Court. The court already gets more than half of all appeal cases in these proceedings.

Court clerks are to be entrusted with simple procedural acts in insolvency proceedings, while the amendments also create the legal framework for electronic communication with lawyers and official receivers, which is to help save money and speed up proceedings.

Head of the task force the justice minister appointed last autumn to draw up the changes, Nina Plavsak, said the most important change in civil bankruptcy is giving individuals the option to start up new business while bankruptcy proceedings are still under way.

The motion does not bring major changes in the chapter on creditors, but only improvements, such as the option of calling meetings of creditor committees in locations outside the seat of the court in charge of the proceedings.

The amendments to the 2008 act are part of the legislative package envisaged in the government exit strategy. The law has been amended twice so far, including to improve the situation of workers and to increase oversight of the debtor.

The motion is now being presented to other governmental departments for comment and a public consultation period will take place.

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