RS Assembly Adopts Draft Bankruptcy Law: Sale of Debtor Assets Under Simplified Procedures

The National Assembly of Republika Srpska adopted yesterday the Draft Law on Bankruptcy, which establishes pre-bankruptcy and bankruptcy proceedings, the legal consequences of opening and conducting these proceedings, the reorganization of a bankrupt debtor unable to pay based on a bankruptcy plan, and international bankruptcy, writes the Bosnian news agency Patria.

A significant novelty in the Law is the introduction of a pre-bankruptcy procedure, which allows an illiquid company to undergo financial restructuring and reach a settlement with creditors, with the aim of easier and more favorable settlement of monetary obligations and continuation of business.

At the same time, this would simplify procedures for the sale of the bankrupt debtor's assets, accelerate the liquidation process, increase transparency in sales, and reduce costs.

The Draft contains solutions that tighten the conditions for the selection of bankruptcy trustees, who must have passed the bankruptcy trustee exam and hold a license that is renewed every four years. The new law would enable the sale of the bankrupt debtor as a legal entity.

The new Draft Law on Bankruptcy in Republika Srpska, supported by the World Bank Group and the Government of Switzerland, will be sent for public consultation in the coming days.

This law could soon come before the Parliament in the Federation as well, writes Patria.