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

Government of Montenegro enacted a Bill on amendments of the Bankruptcy Law, in an effort to make the bankruptcy proceedings more efficient and straightforward, but it also offers significant amendments to the provisions regulating bankruptcy administrators’ appointment and status.  

September 2016 CMS_LawTax_Negative_28-100.eps Enforcing Security over Real Estate and Shares across Europe 2 | Enforcing Security over Real Estate and Shares across Europe 3 Introduction 4 Albania 5 Austria 6 Belgium 7 Bulgaria 8 Czech Republic 9 England and Wales 10 France 11 Germany 12 Hungary 13 Italy 14 Luxembourg 15 Montenegro 16 Netherlands 17 Poland 18 Portugal 19 Romania 20 Russia 21 Scotland 22 Serbia 23 Slovakia 24 Slovenia 25 Spain 26 Turkey 27 Ukraine 28 Contacts Contents 19 practice and sector groups working across offices Ranked 2nd most global law firm in the Am Law 2015 Glob

Bankruptcy and reorganization are the two primary procedures available for solving a collective action problem in dealing with financially troubled debtors, and both are regulated by the Montenegrin Insolvency Act. Bankruptcy envisages settlement with creditors by sale of the debtor’s assets or sale of the debtor as a legal entity, while reorganization involves settlement with creditors in accordance with an adopted reorganization plan which redefines mutual debtor-creditor relations.

Even at first blush, it is apparent that arbitration and insolvency make strange bedfellows.

In general, creditors in Montenegro may secure their claims by various types of security over debtors’ assets, such as pledge (zaloga), mortgage (hipoteka), suretyship (jemstvo), bills of exchange (menica), etc.

Personal bankruptcy has been introduced for the first time in Montenegro. The Personal Bankruptcy Act came into force on 22 August 2015.