We saw important amendments to the Bulgarian Commerce Act (the “Act”) come to life at the very end of 2016, most notably regarding:

Notary certifications – currently in effect

Fraudulent debtors are trying to use a disputable interpretation of Article 37, para 4 of the Special Pledges Act on the outcome of enforcement over a special pledge against the rights of secured mortgage creditors.

The Bulgarian legislator is notorious for leaving gaps in enacted legislation. Often such legal gaps combined with inexperience, or even worse – corruption of judges, lead to questionable judgments being handed down. Several of these judgments have put mortgage creditors at risk of losing their collateral in the past year.

A number of changes have been made to insolvency procedure to remove various discrepancies and controversial practices:

The general legal framework of existing Bulgarian insolvency law covers the core features recognised by the international insolvency community and takes account of EC Regula-tions and Directives. On the other hand, it does not always achieve the proper balance between the need to address the debtor’s financial difficulty as efficiently as possible and the interests of the creditors.

This article highlights some inefficiencies of the existing Bulgarian insolvency regime compared with international best practices.

Scope

The collection of the insolvency estate is one of the important phases of insolvency proceedings. The Bulgarian Commerce Act (Issue No. 48 dated 18 June 1991, as amended) (the “Act”) provides certain tools to facilitate the collection of funds and other assets in order to “maximise” the insolvency estate. One such tool is the ability of the insolvency administrator, or the creditors to the insolvency estate, to challenge the validity of acts and transactions performed by the insolvent company after the insolvency trigger date.

Under Bulgarian law, security interests over assets can be created by way of a pledge (залог) of chattels and receivables or a mortgage (ипотека) over real property.

The means of obtaining information on a person’s creditworthiness were broadened in 2011 by launching a pending execution proceedings register kept by the Bulgarian Private Bailiffs Chamber.

Restructurings, especially those involving multiple jurisdictions, are invariably complex matters. This CMS Expert Guide provides an overview of the various restructuring possibilities available in a large number of countries, allowing you to compare how the options are deployed in these jurisdictions.

We intend to update it periodically to reflect important changes as they happen.

If you need more information or have any questions, please do not hesitate to contact us.

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.

We saw important amendments to the Bulgarian Commerce Act (the “Act”) come to life at the very end of 2016, most notably regarding:

Notary certifications – currently in effect