Latest Changes of Bankruptcy Law in Serbia

A public debate was held on the Draft Law on amendments to the Bankruptcy Law

The Bankruptcy Law of the Republic of Serbia (“Official Gazette of the RS”, No. 104/2009, 99/2011 – other law, 71/2012 – US decision, 83/2014, 113/2017, 44/2018 and 95 / 2018, hereinafter the “Law“) regulates conditions and manner of initiating and conducting bankruptcy proceedings against legal entities.

Bankruptcy is the institute of collective settlement of creditors by general execution on the property of the bankruptcy debtor, whereby he ceases to exist as a legal entity.

The law stipulates that bankruptcy is carried out in two ways:

1. Bankruptcy and
2. By reorganization.

Bankruptcy means the settlement of creditors from the value of the entire property of the bankruptcy debtor, ie the bankruptcy debtor as a legal entity.

Reorganization means settling creditors according to the adopted reorganization plan by redefining debtor-creditor relations, status changes of debtors or in another way provided by the reorganization plan.

The constitutional basis for the enactment of the Law on Amendments to the Bankruptcy Law is contained in Article 97, paragraph 1, items 2 and 7 of the Constitution of the Republic of Serbia, according to which the Republic of Serbia regulates and ensures proceedings before courts and other bodies, regulates and secures property and obligations and protection of all forms of property.

Some of the most significant changes envisaged by the Draft Law on Amendments to the Bankruptcy Law are the following:

• in order to conduct bankruptcy proceedings as efficiently as possible and settle bankruptcy creditors, the urgency of all other proceedings before the courts and competent authorities in which the bankruptcy debtor is a party to the proceedings is envisaged;

• it is envisaged that the bankruptcy trustee is selected from a general or special list of active bankruptcy trustees in accordance with the criteria for classifying legal entities into micro, small and large legal entities;

• the deadline for submitting the request for renewal of the Bankruptcy Trustee’s license is changed, no earlier than 60 days, no later than 10 days before the expiration of the license;

• the reasons for renewal and revocation of the license for performing the activities of the bankruptcy trustee are specified;

• comes to amend the provisions relating to the appointment of a bankruptcy trustee.

• It is specified that the Agency for Licensing of Bankruptcy Trustees compiles a list of active bankruptcy trustees and publishes it on its website.

That said, the list of bankruptcy trustees will consist of a general list – in which all active bankruptcy trustees are entered and a special list in which bankruptcy trustees who meet certain conditions are entered.

• the amount of the advance for conducting the bankruptcy procedure is specified in the part that refers to medium and large legal entities.

• For medium-sized legal entities, the upper limit of 600,000 RSD is further specified depending on the following criteria:

• 200,000.00 RSD – for bankruptcy debtors whose blockade amount does not exceed 100,000.00 RSD,

• 400,000.00 RSD- for bankruptcy debtors whose blockade amount does not exceed 500,000.00 RSD or have previously contracted activities that have not been completed or property in several locations or perform a specific activity related to products that require special treatment,

• 600,000.00 RSD – for bankruptcy debtors whose blockade amount exceeds 500,000.00 RSD or have previously contracted work that is not completed or property in several locations or perform a specific activity related to products that require special treatment or have more than 50 creditors or it is a procedure that has elements of foreignness;

• 1,000,000 RSD for large legal entities, of which:

• 600,000.00 RSD – for bankruptcy debtors whose blockade amount does not exceed 100,000.00 RSD,

• 800,000.00 RSD – for bankruptcy debtors whose blockade amount does not exceed RSD 500,000.00 or have previously contracted activities that have not been completed or property in several locations or perform a specific activity related to products that require special treatment,

• 1,000,000.00 RSD – for bankruptcy debtors whose blockade amount is higher than 500,000.00 RSD or have previously contracted jobs that are not completed or property in several locations or perform a specific activity related to products that require special treatment or have more than 50 creditors or it is a procedure that has elements of foreignness. “

• in order to complete the bankruptcy proceedings as soon as possible, the deadlines for filing claims in bankruptcy proceedings are shortened so that the earliest deadline for filing is shortened to 15 days, and the latest to 60 days.

• One of the most significant changes is reflected in the introduction of the possibility to sell the assets of the bankruptcy debtor electronically, through a special Internet portal maintained by an authorized organization.

These changes seek to ensure more efficient implementation of bankruptcy proceedings and the creation of a better business environment.