Editorial | Restructuring Directive  

Editorial | CEE

Reasoning behind the changes

In the two years that the "new" bankruptcy regime – the Bankruptcy Act of September 2015 (Stečajni zakon; the "BA") – has been in place, the number of pre-bankruptcy procedures initiated in Croatia has plummeted to only 273, with 58 restructuring plans being accepted. By comparison, under the previous pre-bankruptcy regime from 2012 to 2015, 8,262 pre-bankruptcy procedures were initiated, with 2,224 restructuring plans being reached.

The recently adopted Croatian Bankruptcy Act ("SZ")[1] sets out a new integrated pre-bankruptcy and bankruptcy regime. SZ has entirely replaced the previous bankruptcy act that was in force for 18 years, as well as provisions regulating pre-bankruptcy settlement proceedings prescribed under the Act on Financial Operations and Pre-bankruptcy Settlement

A party's right to terminate a contract in the event that the other party becomes insolvent is one of the most commonly seen termination rights in outsourcing and technology agreements. However, the effectiveness of such provisions in the future could change in agreements governing the provision of IT services, as the new Enterprise and Regulatory Reform Act 2013 gives the Government the power to extend the law that currently protects supplies of gas, water, electricity and communication services during an organisation's insolvency to the supply of IT services.