Insolvency Abuse Has Cost Latvia €665 Million, Say Foreign Investors

Even though new insolvency administration legislature has been introduced, there's "a lot to be done" in order to avert its shortcomings, Zlata Elksniņa-Zaščirinska, head of the Foreign Investors Council in Latvia (FICIL), told Latvian Television Wednesday. The FICIL on Wednesday published an insolvency abuse report saying that even though legislature has been pushed through compliant to the requirements of the Organization for Economic Cooperation and Development, the overall situation in insolvency administration has not improved. According to the report, from 2008 to 2014 Latvia may have lost around €665m due to insolvency abuse, taking into account both financial and non-financial loss. The research spans more than 9,000 insolvency processes and finds that more than 60% of insolvency administrators have either not filed reports about the processes or filed them only partially. The research has found at least 1,500 insolvency processes with suspected foul play. Among telltale signs that could point to unscrupulousness are fictitious creditors and the overhaul of the board prior to starting the insolvency process, with the goal of evading liability.Read more.