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Ieva Strunkiene on Draft Law on the Insolvency of Legal Entities

Primus senior associate Ieva Strunkienė contributed an article about the new Draft Law on the Insolvency of Legal Entities in Lithuania to the Autumn edition of Eurofenix journal.

In order to consolidate bankruptcy and restructuring processes into a single statute, to combine the bankruptcy and restructuring professions into one, to resolve the issue of self-governance of this combined profession and to clarify the interpretation of the provisions of the bankruptcy and restructuring laws, the Draft Law on the Insolvency of Legal Entities was prepared in Lithuania in 2018.

In preparing the Draft, it was established that historically the law presented many deficiencies: the percentages paid to creditors were extremely low; the bankruptcy process took too long; the regulation of the profession of insolvency administrators was inadequate; and the administrative expenses and the administrator’s renumeration lead to extended legal disputes as a result of which an insolvent legal entity suffered excessive litigation expenses and delays. The Draft therefore includes the following new ideas:

  • Enlargement of the concept of insolvency
  • Agreement on assistance to overcome financial difficulties
  • Administration of enterprises without assets
  • Change of rank of the creditors’ claims
  • Administrators as a sole person

Electronic version of the article is available here.

About Eurofenix

Eurofenix is INSOL Europe’s quarterly journal and has recently celebrated its fiftieth edition. The journal is distributed widely within the European and global insolvency and restructuring community.