site.btaNew Directive to Harmonise Aspects of Insolvency Law between EU Countries

A new directive on the harmonisation of insolvency proceedings of companies in the EU is being drafted, MEP Emil Radev told BTA on Friday. In his words, the reason is that rules are very different between member states. In some countries such proceedings are completed in six months, whereas in other countries they last 7-8 years, Radev explained. He added that there are also serious differences in debt recovery. All this requires harmonisation of procedures so that investors who are ready to invest money in another member state feel secure, Radev added. In his words, companies need legal certainty to know that in case of bankruptcy they will be able to recover most of what they have invested, and in clear, transparent and fast procedures.

The Bulgarian MEP is a rapporteur on the new Directive on the harmonisation of insolvency law in the EU and assured that the work will be done at a fast pace, especially considering that more than 20% of these cases have a cross-border aspect. Where there are foreign creditors, or assets have to be recovered in another member state, the new directive would be of great benefit as it would improve the whole investment climate in the EU, Radev said. He also stressed that when everything is predictable, apart from investors, creditors, tax authorities, including employees in companies, will also be reassured. The MEP also commented that the directive should also pay attention to the costs for this type of proceedings, as they differ from country to country.

The MEP recalled that Bulgaria has not yet adopted a law on individual bankruptcy, although there is such a European directive. Bulgaria failed to meet all the deadlines for harmonisation of the legislation, not to mention that the law was included in the Recovery and Resilience Plan, Radev said. According to him, it should become a fact as soon as possible, because in the EU only Bulgaria does not have a regime under which individual bankruptcy can be declared, and there are eternal debtors. Whose debts are inherited by their children.