site.btaParliament Passes on First Reading Amendments to Bank Bankruptcy Act Prompted by Corpbank Case

Parliament Passes on First Reading Amendments to Bank Bankruptcy Act Prompted by Corpbank Case

Sofia, March 11 (BTA) - Bulgaria's Parliament Friday passed on first reading amendments to the Bank Bankruptcy Act, moved by the Movement for Rights and Freedoms (MRF), obliging the trustee in bankruptcy of a failed bank to publish the report on the state of the credit institution's assets notwithstanding the contractual confidentiality clauses. The vote was 124 in favour and 4 abstentions.

The amendments impose an obligation on the trustee to publish the report on its Internet site, omitting only the recommendations for the collection of receivables. The provisions will apply to pending proceedings and the contracts concluded under them.

"This bill is an expression of our shared will to make public everything surrounding Corpbank's failure, as well as any similar cases in future," said Yordan Tsonev MP of the MRF, who co-authored the draft legislation.

AlixPartners Services UK LLP was hired in June 2015 by the Corpbank trustees in bankruptcy to track and recover the failed bank's assets. The firm submitted its report on September 23, 2015. Approached by the Government with a request that the report be made public, AlixPartners said that the report contains sensitive financial and commercial information and the confidentiality clauses of the contract should be observed in the interest of preserving the bankruptcy estate. However, considering the overriding public interest to uncover the truth about Corpbank's failure, the firm agreed to have the report available in Parliament's classified registry, where MPs can view it on condition of non-disclosure.

On Friday, the legislature also adopted amendments to the same law proposed by GERB. The vote was 145 in favour and 1 abstention. The revisions are intended to streamline the legal framework of bank bankruptcy proceedings by providing for identical time limits and procedures in the Code of Civil Procedure and the Bank Bankruptcy Act. The amendments regulate the rights and obligations of the trustee in bankruptcy, his remuneration, the reporting period, the manner of summoning the parties and the service of process, as well as the possibility for the trustee to agree on lawyers' fees lower than the fees fixed in the relevant ordinance.

Danail Kirilov MP of GERB, who is among the sponsors of the bill, said that more than 400 cases related to Corpbank will be filed shortly, concerning objections to allowed or disallowed claims.

Martin Dimitrov MP of the Reformist Bloc noted that, in addition to the report on the international investigation (with the exception of the recommendations), the contract commissioning the international investigation must be made public, too. Besides this, he argued, the international investigation firm must be directly involved in the recovery of the bad loans.

Yordan Tsonev MP of the MRF seconded these motions. In his opinion, in a case of overriding public interest like Corpbank, all confidentiality must be waived.