Amendments to the Bankruptcy Act

Bulgaria
UniCredit Bulbank AD
Thu, 15/03/2018

The amended Bank Bankruptcy Act brings changes to the limitation of powers and governs transactions executed by third parties.                                                                                   

 

The Act on Amendment and Addition to the Bank Bankruptcy Act entered into force in March. It is applicable retroactively to all open insolvency proceedings before the date of the enforcement of this act.

The main changes are as follows:

  • Limitation of powers: The trustee and temporary trustee in a bankruptcy are not entitled, until the date of opening a procedure for liquidation of the estate of the bank, to delete collaterals constituted by debtors, except in cases in which the claim of the bank has been extinguished in full through a cash payment.
  • Invalidity of transactions executed by third parties: A transaction in which a receivable with origin from the bank is transferred to a third person, irrespective of the number of transfers, shall be considered invalid as regards the bank and the creditors of the bank, if as a result of this transaction and within a reasonable timeframe (not longer than 6 months), the person who has dealt with the claim has not received against it a cash payment or an asset different than a receivable for a price proportionate to the transferred claim. The (temporary) trustee in the bankruptcy or the Deposit Insurance Fund may raise claims before the insolvency court to declare the invalidity of such transactions within 5 years from the opening of insolvency proceedings against the respective bank.

 

Kristina Spasova
Relationship Manager
Global Securities Services Bulgaria
kristina.spasova@unicreditgroup.bg