Control to Serbian Creditors- the amendments to the Serbian Insolvency Act
The recent amendments to the Serbian Insolvency Act enacted 9 December 2018 have placed more control into creditors’ hands allowing them to suggest the insolvency administrator to be appointed, as well as providing less restrictive provisions on the proposers of reorganisation proposals.
The benefit of these changes to the Insolvency Act is to increase the attractiveness of insolvency proceedings and reorganisation for the creditors as well as make the initiation of proceedings cheaper for creditors, and to allow easier reorganisation.
Prior to the amendments, insolvency administrators were appointed from a list provided by the Insolvency Administrator Supervision Agency. Whilst creditors could request removal of the administrator (provided at least ¾ members of the board of creditors voted for removal), they had no impact on the initial choice.
Following the amendments, the creditor who filed for the debtor’s insolvency can now propose the insolvency administrator. The court has the obligation to consider such a proposal, but ultimately the decision on who is appointed is at the discretion of the insolvency judge. Equally, creditors can request replacement of the insolvency administrator, although only after the hearing for examination of the assets, with at least ¾ votes for the replacement, and with prior consent of the creditors.
The final amendment of the Insolvency Act is to abolish the thresholds for filing of the reorganisation plan. Previously, only 30% of secured creditors or 30% of insolvency creditors could file for a reorganisation plan. Following the abolition of these percentages any creditor can file for a reorganisation plan regardless of the amount of their assets or shareholding interest, allowing the process to be accessible for all creditors.
Overall it is thought these amendments will help to:
- prevent possible delays of the process prior to the hearing for examination of the receivables;
- prevent possible abuses with an unfounded request for replacement; and
- include a greater number of interested creditors in decision making through the approval.
Changes to Swiss debt enforcement and bankruptcy law effective January 2019
On 1 January 2019, certain changes were enacted to Swiss debt enforcement and bankruptcy law. The updated law aims to facilitate the recognition of cross border bankruptcy proceedings and afford better protection for debtors against unjustified and antagonistic debt enforcement processes.
The Swiss Debt Enforcement and Bankruptcy Act (DEBA) allows a creditor to request the debt enforcement office issue a payment order to the debtor without verification of the existence or enforceability of the purported claim. The debtor then has ten days to declare their objection to the payment order. In the event of an objection, the creditor will have to obtain a court decree before continuing with the enforcement proceedings.
Each debt enforcement office keeps a register of payment orders, objections and further enforcement steps taken and any person who can establish a legitimate interest in obtaining this information has the right to access the register for a period of five years. It is the current position that merely an intention to enter into a contract will create a sufficient interest to access the register. The debt enforcement register is therefore an important source for credit assessments. Given that the debt enforcement office does not assess the purported claims before issuing a payment order, an unjustified payment order which appears in the register can have a substantial adverse impact on the ability of an individual or entity to do business, especially when the appearance of invalid claims is a possibility.
As of January 2019, in an attempt to minimise the negative effect of unfounded payment orders, art 8a of DEBA has been amended to allow a debtor objecting to a payment order to request that following three months after service of the order the information is wiped from the register (unless the creditor can prove they have initiated judicial steps to continue to enforce the debt). Following the request the creditor has 20 days to provide evidence of further enforcement, and if they fail to do so the respective payment order will be wiped from the register. Further guidance has confirmed however that the payment order will reappear in the register if the creditor at a later date provides evidence it has initiated proceedings or if debt enforcement proceedings are continued following a court decision.
HMV sold to Canadian retailer safeguarding over 1,500 jobs
Further to the announcement between Christmas and New Year that public entertainment company HMV had appointed KPMG as Administrators, it has since been announced that Canadian music enterprise Sunrise Records has bought the UK based business heading off competition from other key contenders.
Previously blaming the tough conditions during the key Christmas trading period as a fight between online streaming services and the high street , the disappearance of the last major specialist music retailer on the high street is something the record labels have been keen to avoid for years.
Whilst the sale of the business is likely to save over 1,500 jobs, under the deal 27 of HMV’s stores will close immediately with the loss of 455 jobs. A further 122 warehouse jobs are expected to be lost in the weeks to come.
In a statement announcing the deal, Putman said: “We are delighted to acquire the most iconic music and entertainment business in the UK and add nearly 1,500 employees to our growing team. By catering to music and entertainment lovers, we are incredibly excited about the opportunity to engage customers with a diverse range of physical format content, and replicate our success in Canada”.
Being the second time HMV has collapsed into Administration since the millennium it is hoped this new sale will provide security for the company for the future.