This guide provides a comparative analysis of certain key areas of law and procedure for those involved in or affected by financial distress of a corporation and the trading of distressed debt across Europe.

On 21 July 2017, a draft bill on the protection of over-indebted natural persons was submitted to the Bulgarian Parliament (the “Bill”). The Bill introduces a new legal framework to address personal over-indebtedness and to protect indebted persons from a lifetime of indebtedness while ensuring a fair satisfaction of creditors.

In the wake of increased competition stemming from the recent liberalisation of the Bulgarian electricity market, more and more electricity players and major electricity traders such as Future Energy and Energy Financing Group are now facing serious financial difficulties.

According to reports, some are now fighting to stay afloat after the initiation of insolvency proceedings. Given this increased market pressure, analysts state it is likely these and other energy traders may declare bankruptcy and face eventual liquidation.

Es exclusiva la competencia de los tribunales del Estado miembro en cuyo territorio se ha abierto un procedimiento de insolvencia para conocer de una acción revocatoria por insolvencia ejercitada contra un demandado cuyo domicilio se encuentra en otro Estado miembro.

The Court clarifies many debatable questions related to insolvency proceedings under the Bulgarian Commercial Act

February 2019 – On 3 December 2018, Bulgaria’s Supreme Court of Cassation (“SCC”) issued Interpretative Judgment No 1 (the “Judgement”) on interpretative proceedings No 1/2017 of the General Assembly of the Panel of Commerce. The Judgement provides guidance to certain issues concerning insolvency proceedings that in the past have been adjudicated differently by the courts. In particular, courts have reached different interpretations of certain provisions of Bulgarian law directly relating to the participation of creditors in insolvency proceedings and the satisfaction of their claims.

 On 22 February 2019 and 26 February 2019 two bills were introduced in the Bulgarian parliament to amend the existing Bank Insolvency Act (“Bills”).

Last week, one of the largest tour operators and package tour operators in the world shut down – Thomas Cook. On September 23, 2019, the UK Supreme Court appointed an Official Receiver, a figure similar to the insolvency receiver in Bulgaria, who takes over the “management” of dozens of Thomas Cook Group companies and appoints consulting firms AlixPartners and KPMG to support the process.

Bulgaria has been in a state of emergency since 13 March due to the COVID-19 outbreak. On 23 March the Parliament voted on a special State of Emergency Act (COVID-19 Act) which suspended all court, arbitration and enforcement terms and proceedings during the state of emergency, currently in force until 13 April.

Recently, the Bulgarian Ministry of Justice introduced a draft amendment to the Commerce Act (the "Amendment"). Amongst other proposed changes, the Amendment introduces a procedure for the reorganisation of companies, prior to their entering into an insolvency procedure.