Bulgaria High Court Challenges Constitutionality of Bank Insolvency Law Amendments

Bulgaria’s Constitutional Court will rule on whether amendments to Bulgaria’s bank insolvency law, passed by Parliament earlier this year, breach constitutional provisions, the Sofia Globe reported. The controversial amendments, tabled by the opposition Movement for Rights and Freedoms (MRF) but backed by the government coalition, have been criticised by legal experts for introducing a retroactive effect. The bill, authored by MRF MPs Yordan Tsonev, Delyan Peevski and Hamid Hamid, aims to suspend the cession contracts involving an insolvent bank’s receivers – deals in which depositors in the insolvent bank would sell their claims to the bank’s debtors, who would then cancel all or part of their debts using the newly-acquired deposit claim. Because of the retroactive effect of the bill, the amendments would apply to the case of Corporate Commercial Bank, the only Bulgarian lender to be declared insolvent in recent years. Read more.