On 7 December 2022, the EU Commission published a draft directive harmonising certain aspects of insolvency law, which is now undergoing EU legislative procedure. In light of this the proposal, this article provides an overview of the current state of avoidance rights regulation under the insolvency legal framework in Bosnia and Herzegovina.

Insolvency avoidance rights regulation in Bosnia and Herzegovina

In response to the EU Commission's proposal for a directive to harmonse specific elements of insolvency law on 7 December 2022, this article explores avoidance actions, one of the Directive Proposal’s key aspects, and the way avoidance actions are regulated in Serbia and Montenegro as EU candidate countries.

In the context of insolvency proceedings, avoidance actions involve the annulment of transactions undertaken by the insolvent debtor before the initiation of insolvency proceedings.

Avoidance actions in Serbia

After a long and arduous litigation Jet Airways’ insolvency woes have finally reached a conclusion. At least that is the hope unless the litigation is taken to the Supreme Court. Having said that, the National Company Law Appellate Tribunal (“NCLAT”) in its decision dated 12.03.2024, in Company Appeal (AT) (Insolvency) No. 129 & 130 of 2023, approved the transfer of ownership of Jet Airways to the Jalan Kalrock Consortium (“JKC”). This hopefully leads the path for the commencement of a new era for the airline.

Businesses often rely on trade credit insurance to protect themselves from customers’ inability to pay for products or services. An interesting question that arose recently in the Indian insolvency context was that when a creditor’s claim for pending dues is paid out by an insurer, can the creditor, having received such pay-out, maintain an insolvency action against the debtor? The National Company Law Tribunal (“NCLAT”) has answered this in the affirmative.

The latest government insolvency statistics highlight that the downturn in the UK economy is still taking a significant toll and the number of UK corporate insolvencies in February 2024 remains high (and 17% higher compared to February 2023).

Latest insolvency statistics

February 2024 saw 2,102 company insolvencies, the highest February figures for at least four years.

The Singapore International Commercial Court ("SICC") has handed down its first insolvency-related ruling. The court granted recognition and full force and effect to Indonesia's flagship airline's restructuring plan. That plan had been approved in accordance with Indonesian law. In granting recognition to the Indonesian plan under Singapore's version of the UNCITRAL Model Law on Cross-Border Insolvency, the SICC overruled objections to recognition from aircraft lessors.

General

As a general rule, Law No. 37 of 2004 on Bankruptcy and Delay of Payment (“Law No. 37/2004”) provides that a delay of payment of petition should be granted by the relevant commercial court’s judges if it meets the following requirements:

a. The debtor has two or more creditors; and

b. At least one of the debts is due and payable.

Austria implemented Directive (EU) 2019/1023 on preventive restructuring frameworks with the Restructuring Regulation, which came into force on July 17, 2021, and introduced (further) judicial proceedings for preventive restructuring. Practice, however, has shown that the reorganization plan in insolvency proceedings and out-of-court restructuring remain the methods of choice in Austria.

The preamble of the Insolvency and Bankruptcy Code, 2016 (‘Code’) states its objectives, which are maximisation of value of assets, promote entrepreneurship, within the stipulate time frame. Apart from the initiation of Corporate Insolvency Resolution Professional (‘CIRP’) or the Liquidation Process, the Code also provides for a class of transactions which can be ‘avoided’ or ‘undone’ by the appointed Resolution Professional (‘RP’) or the Liquidator, by preferring an Application before the Adjudicating Authority.

For industry professionals in India, the Insolvency and Bankruptcy Code (IBC), 2016, has been a game-changer. The introduction of a formal framework for insolvency resolution has brought much-needed clarity and efficiency to dealing with financial distress. However, the 2019 Regulations introduced a new dimension - the ability for personal guarantors (PGs) to initiate insolvency proceedings. This has significantly impacted the role of Resolution Professionals (RPs).