Insolvency proceedings in Bulgaria
The foreign companies and merchants asked us for a consultancy in Insolvency proceedings in Bulgaria.
In Bulgaria, the scope of insolvency proceedings is specifically restricted to commercial entities and traders, with no provision for personal insolvency.
Compliance with the Bulgarian Commercial Act is mandatory, requiring confirmation of insolvency or excessive indebtedness, primarily for capital
Understanding Insolvency Under the Bulgarian Commercial Act
As per Article 608 of the Commercial Act, insolvency is characterized by a trader’s incapacity to fulfill financial obligations arising from commercial transactions, public duties to the state and municipalities related to their commercial activities, or private state obligations.
This state of insolvency is automatically assumed if the debtor has suspended payments or demonstrated preferential treatment towards certain creditors over others.
Excessive Indebtedness in Capital Companies
In the context of capital companies, Article 742 Commercial Act identifies excessive indebtedness when a company’s assets fall short of covering all its financial obligations.
This situation necessitates prompt legal action to address financial distress and prevent further financial deterioration.
Objectives of Insolvency Proceedings
Insolvency proceedings can be initiated with dual objectives:
1. **Business Reconstruction**: Aimed at sustaining the company by restructuring its debt and operational strategies to regain financial stability.
2. **Debt Satisfaction and Liquidation**: Focusing on satisfying creditors’ claims followed by the eventual liquidation of the company if reconstruction is not feasible.
Initiating Insolvency Proceedings
The filing for insolvency is a prerogative extended to various entities, including:
– The debtor
– The debtor’s representative
– Heirs of the debtor
– Liquidator of the company
– Any creditor involved in sale transactions
– A member of the capital company’s managing body
– The registry agency
Expert Legal Support for Navigating Insolvency
Trust the expertise of professionals to navigate through insolvency complexities and ensure compliance with legal requirements.
Our legal support in insolvency proceedings includes:
– Comprehensive evaluation of financial status and confirmation of insolvency
– Strategic advice on business reconstruction plans
– Detailed guidance through debt satisfaction and liquidation processes
– Representation and advocacy in insolvency court proceedings
By leveraging our expertise, commercial entities can effectively manage insolvency, safeguard their interests, and explore viable pathways to financial recovery or orderly liquidation.
Why Choose Us?
– Experience: Extensive experience in handling complex insolvency cases for various commercial entities.
– Expertise: Deep understanding of the Bulgarian Commercial Act and related legal frameworks.
– Dedication: Commitment to providing personalized legal solutions tailored to each client’s unique circumstances.
– Results-Oriented: Focus on achieving the best possible outcomes, whether through business reconstruction
Our legal support in insolvency proceedings …….
Insolvency proceedings can be initiated with dual objectives:
- the first being business reconstruction to sustain the company, and
- the second focusing on debt satisfaction followed by eventual liquidation.
The filing for insolvency is a prerogative extended to various entities, including
- the debtor, their representative,
- heirs,
- liquidator,
- any creditor,
- money leanders, involved in sale transactions,
- a member of the capital company’s managing body, or
- the registry agency.
Open an insolvency in Bulgaria
Navigating Insolvency Proceedings in Bulgaria: Key Aspects and Legal Requirements
Article 613 of the Bulgarian Commercial Act designates the district court in the location of the insolvency debtor to decide on the commencement of insolvency proceedings.
The court validates insolvency or excessive indebtedness and determines the timing of the occurrence.
Failure to meet specified conditions may lead to the dismissal of the application for insolvency proceedings in Bulgaria by the court.
Key Steps in the Insolvency Process
Upon a favorable court decision:
1.Appointment of Insolvency Administrator: An insolvency administrator is appointed to oversee the process.
2. Implementation of Protective Measures**: Protective measures are put in place to safeguard the debtor’s assets.
3.Scheduling of Creditors’ Meetings**: Dates for creditors’ meetings are scheduled to discuss the insolvency proceedings.
Implications of the Court Order
This court order has significant implications for all parties involved:
– **For the Debtor**: The debtor faces legal incapacitation and must act in alignment with the insolvency administrator’s directives.
– **For Creditors**: All ongoing court and enforcement proceedings against the debtor are halted.
Obligations of Garnishees
Garnishees are required to fulfill their obligations to the insolvency administrator as per the court’s decision, ensuring a structured and regulated insolvency process.
Professional Legal Support
Consult with professionals to navigate through insolvency procedures efficiently and in compliance with legal requisites.
Expert legal guidance ensures adherence to the Bulgarian Commercial Act, safeguarding your interests throughout the insolvency process.
