Following the adoption of a completely new Insolvency Act in 2009, which introduced significant changes to the existing Serbian insolvency framework, and changes thereof which followed in 2014, the Insolvency Act is once again about to be amended.
Currently, the Bill is in the public debate phase, aiming at consolidation and finding the most suitable solutions for the currently existing problems. Primarily, changes are necessary to remove all aspects that were slowing down the procedure and making it inefficient, which are expected to lead to an improved and more secure business environment in Serbia.
The primary aim of the proposed changes is to increase the efficiency of insolvency proceedings, primarily to improve the position of secured creditors, which often bear the burden of exceedingly lengthy insolvency proceedings. These amendments will allow secured creditors to participate in the decision-making process during insolvency proceedings regarding the sales or leasing of the secured assets, and will be given the opportunity to satisfy their claims in a more convenient manner.
The deadlines for decisions on opening of insolvency or reorganization proceedings are also planned to be shortened. Furthermore, proposed amendments introduce a more efficient mechanism for dismissal of appointed insolvency administrators when it is deemed during the proceedings that they have not been performing appropriately.
Overall, insolvency legislation in Serbia has received high marks. It is considered by the International Monetary Fund (IMF) to be in line with “best international practices”, notwithstanding certain smaller flaws, which the legislators plan to reduce and eliminate by the upcoming amendments. The public debate regarding the Bill will be open until October 30th 2016.
By Milan Samardzic, Partner, and Sanja Dosen, Associate, SOG / Samardzic, Oreski & Grbovic
