Introduction

Les cas d’insolvabilité commerciale devraient continuer d’augmenter à court terme en raison de la hausse des taux d’intérêt, des perturbations dans les chaînes d’approvisionnement et de l’augmentation conséquente du coût des marchandises. Une flambée des cas d’insolvabilité commerciale pourrait également augmenter la probabilité que les entreprises soient touchées par une procédure d’insolvabilité officielle en tant que créancier, fournisseur ou client, ou autrement en tant que partie prenante.

Introduction

Commercial insolvencies are expected to steadily increase in the near-term due to higher interest rates, supply chain disruption and corresponding increased commodity costs. A rise in commercial insolvencies will increase the likelihood that businesses will be impacted by a formal insolvency proceeding, whether as a creditor, supplier, customer or other stakeholder. It is, therefore, important for businesses to understand how to strategize in the context of both newly initiated and ongoing insolvency proceedings.

Commercial insolvencies are expected to steadily increase in the near-term due to higher interest rates, supply chain disruption and corresponding increased commodity costs. A rise in commercial insolvencies will increase the likelihood that businesses will be impacted by a formal insolvency proceeding, whether as a creditor, supplier, customer or other stakeholder. It is, therefore, important for businesses to understand how to strategize in the context of both newly initiated and ongoing insolvency proceedings.

On 7 December 2022, the European Commission published a draft directive aimed at harmonizing certain aspects of insolvency law. The intention behind this directive is to mandate the inclusion of "pre-pack proceedings" in national insolvency laws across the European Union ("EU"). Although Türkiye is not a member of the EU and does not have specific rules for governing pre-pack insolvency sales, it does have procedures that are similar, if not an identical, to pre-pack proceedings.

In this article we will take a closer look at Türkiye's pre-pack-like institution.

The pre-pack insolvency sale is not currently regulated under Bulgarian law.

The Bulgarian law currently regulates the implementation of a recovery plan as a stage of opened insolvency proceedings, such recovery plan may provide for the sale of the business as a going concern, or the sale of a business as a going concern prior to opening insolvency proceedings. The recovery plan is described in more detail below.

In late 2022, the European Commission proposed a new Directive with a view to harmonise certain aspects of insolvency law. One of the most important innovations to be introduced in this Draft Directive is pre-pack proceedings.

What is a pre-pack sale?

Only a year ago, Slovakia transposed EU Directive 2019/2023 on preventive restructuring frameworks with an intention to reform insolvency proceedings and make them more effective.

The Bulgarian government has introduced a new form of insolvency regime directed at merchants effective from 1 July 2023. In this new framework, a merchant is distinctly defined as an individual involved in business or practising a craft or a liberal profession. The criterion for the classification is the nature and scale of the operations, which should not necessitate conducting activities in a purely commercial manner.