Insolvency and Secured Transactions

Changes in the Field of Bankruptcy – To More Efficient and More Secure Bankruptcy Proceedings in Bulgaria

On 22 December 2016 the last changes in the Commerce act were adopted. Among them are also the amendments of the bankruptcy proceedings legislation and the creation of completely new proceedings –business stabilization proceedings. One of the purposes of these changes is to catch up with the prevailing in the last years tendencies at a transnational level within the European Union, for guaranteeing the existence of procedures, which can ensure the possibility for undertakings to stabilize, and also for conducting efficient bankruptcy proceedings, which can result in providing fair satisfaction of creditors‘ .

The Resolution, adopted by the European Parliament on 15 November 2011, refers clearly to the need of harmonization of the legislation of the Member States in the field of the bankruptcy and it also indicates the guidelines of the necessary changes, which have to affect the initiation of the bankruptcy proceedings, the presentment of claims, the rules for the revocatory actions, etc. Different guidelines for creating plans for restructuring of the undertakings, the effect and the content of these plans are also adduced in the Resolution.

An important prerequisite for the amendment in the Commerce Act is the European Commission Recommendation from 12 March 2014 which sets forth as a highest priority the possibility for restructuring of the undertakings, which can prevent the risk of becoming insolvent and lead to maximum benefit for the undertakings and their creditors and employees – direct answer to this purpose is the creation of the stabilization proceedings. Namely, giving a second chance to the threatened undertakings by using  a set of measures aimed to improve the financial situation of the entrepreneurs and to stabilize them as well as preserving the interests of the creditors at the same time, according to the opinion of the European Commission are between the most important prerequisites for increasing the level of transboundary investments, stimulating the turnover and creating more favorable conditions for taking risks, especially for the small and medium-sized undertakings. Main condition for achieving the targets is efficient rules to be created and the existing rules to be universalized, which will resulted in minimum standards in all Member States, which standards will be a guarantee for the security of the entrepreneurs.

Furthermore, the amendment of the bankruptcy proceedings legislation is one of the guidelines, set out in the European Council Recommendation on 14 July 2015. Among the recommendations of the Council is also the preparation for comprehensive reform of the bankruptcy legislation, in accordance with the best international practices and experience.

Last but not least, the changes in the Commerce Act are also based on the recommendations of the World Bank from November 2015, given in accordance with the bankruptcy legislation and the rights of the creditors. Specific remarks are identified in the recommendations.They are connected with the excessive delay of the implementation of the initial phase of the bankruptcy proceedings, the rules for the satisfaction of the creditors and the necessity for following the established good international practices in the field of the bankruptcy.

In view of the above mentioned, we continue with the amendments of the legal rules, which govern the bankruptcy proceedings, with the proviso that they are not for their own sake, but are result of the existing in the last years tendency for achieving minimum standards in the legislation. These standards are in full accordance with the international practices and the experience, based on other European legislations. The standards are supposed to guarantee, to a greater extent, conducting appropriate proceedings, which ensures the secure of the interests of the parties.

I. Amendments, related to the initial phase of the bankruptcy proceedings.

The changes in the Article 608 of the Commerce Act are related to amending and supplementing the existing presumptions for insolvency and also related to establishing new presumptions. According to Article 608(2) of Commerce Act, its presumed that a merchant is unable to perform monetary obligation, if before the date when the petition for institution of bankruptcy proceedings has been filed, had not been reported for announcement in the Trade Register his annual financial statement for the last three years. That provision also applies to the pending proceedings, in which a petition for institution of bankruptcy proceedings has been filed, but the insolvency is not still declared. Article 608provides that the insolvency is presumed in any enforcement proceedings in case the company is unable to meet: a monetary obligation arising from or regarding a commercial transaction, a public law obligation to the state or municipalities related to the commercial activity, or a private state obligation. The rule that the insolvency shall be presumed when the debtor has suspended payments was preserved, but the wording, that the presumption is valid also when the debtor has been satisfied the claims fully or in part, but of individual creditors is added.

The purpose of those amendments is of the one part, additional rules for creditors’ protection to be created, for example, not reporting for announcement in the Trade Register the annual financial statement in itself is an indicator for deterioration of the undertaking’s economic situation. Of the other part, the introducing of this amendments is aimed at creating more efficient bankruptcy proceedings and saving time and efforts in the beginning of the proceedings. One of the arguments, mentioned in the reasons of the Act amending and supplementing the Commerce Act, in accordance with the recommendations in the World Bank report from 2015, isthat the introduction of new rules in the field of the insolvency will make proving the state of insolvencyeasier. The new rules also will terminate the existing practices on the initial phase of the proceedings to continue for a disproportionately long period oftime, because of the absence of possibility the insolvency to be declared on the basis of the annual financial statement, which in most cases are kept irregularly.

1. Which are the legal entities, to whom the new presumption of Article 608(2) shall be applicable and what are the elements constituting the implementation of the presumption?

An obligation for preparing annual financial statement have the profit and non-profit legal entities. In accordance with Article 29(1) of Accountancy Act, the annual financial statement for all undertakings contains at least accounting balance, report on incomes and expenses and an annex.In Article 29(2) is mentioned, that the form, structure and content of the full set of the financial statement are determined by the applicable accounting standards. All required documents must be reported for announcement in the Trade Register. Exemptions are provided in Article 29(3,4,6) for the parts of the annual financial statement of sole proprietors, micro undertakings and small undertakings. The undertakings prepare their annual financial statement as of 31 December of the reporting period.

The order and the periods for publishing the annual financial statement are determined in Article 38(1) of Accountancy Act. It is enough for the statement to be reported for publishing, because the actual publishing may take a period of time.  

The provision is related only with the annual financial statements and shall not apply to the consolidated financial statements and the interim financial statements.

      Lastly, the prerequisite for not reporting for publishing the annual financial statements shall be for the last three consecutive years, predating the day when the petition for institution of bankruptcy proceedings has been filed.

Having considered the above, the new presumption does not automatically cause declaring an insolvency and does not exclude obtaining evidences in the course of the bankruptcy proceedings, even if there is absence of annual financial statements,if they are prepared irregularly, or are incomplete or inaccurate.

      2. In relation to the amendment in 608(3)of Commerce Act.

Due to the new wording, the payments to individual creditors do not exclude the application of the presumption of Article 608(3). Of the other side, this doesn’t mean that the court will declare the insolvency if the debtor does not pay or pays partly to the creditor, who has filed the petition. The suspension of the payments must be considered with regard to all creditors, and the burden of proof shall be incumbent on the debtor, who has to prove that he is not insolvent.

3. What requirements does the provision of Article 608(4) of Commerce Act set?

First of all, there must be an uncontested claim, which is established with entered into force act. It’s without significance if the act has the force of res judicata. In this case, the convictions and the rulings of the court, enforcement orders, pursuant to Article 410 and 417 of Civil Procedure Code (because of the fact that the enforcement order pursuant to Article 417 is an act with anticipatory enforcement, it applies after its entering into force), arbitration judgements, judgements of the courts of another Member States, etc. are included. Inapplicable to that case are the injunctive orders, the enforcement pursuant to Registered Pledges Act, and also the enforcement with the assistance of bailiffpursuant to Article 521 and Article 522 of Civil Procedure Code, in conjunction with Article 35 of Registered Pledges Act– in the cases of delivery of possession and delivering movable thing, when it is awarded by the creditor.

Furthermore, there must be enforcement proceeding, instituted pursuant to Civil Procedure Code  or Tax and Social-Insurance Procedure Code. It’s without significance if the creditor is original one or joint claimant.

The third prerequisite for the application of the presumption is that the claim of the creditor must stay fully or in part unsatisfied in the term of six months after receiving the notice of voluntary compliance. It’s without significance, if actions for coercive enforcement actually are set by the bailiff.In the case of enforcement order pursuant to Article 417, the intended time limit shall run from the date, when the enforcement order enters into force. In the case, when the person who has been filed the petition for institution of bankruptcy proceeding is a joint claimant in the enforcement proceeding, the time limit shall run from the moment of the joining.

For the application of the provision of Article 608(4) of Commerce Act, it is without significance, if the creditor with the unsatisfied claim has been filed the petition for institution of bankruptcy proceeding or is a joint claimant. But it is necessary the claim, for which collection the enforcement proceeding is instituted, to be one of the mentioned claims in Article 608(1) of Commerce Act, namely:monetary obligation, caused by or concerned to commercial transaction;public-law obligation related to the commercial activity of the debtor or an obligation under a private state. Also, the provision of Article 608(4) of Commerce Act is inapplicable to that case when the petition for institution of bankruptcy proceedings has been filed by the debtor.

II. Amendments, related to the bodies in the bankruptcy proceeding.

1. In Article 657 the prerequisites and the rules for discharging of the trustee are mentioned. There is a new subparagraph in that Article, which provides the possibility for appeal against the ruling of the Court of Appeals, that upholds the ruling of the bankruptcy court  pursuant to subparagraph 4, point 2 from the same article – with this act the bankruptcy court on a petition by the debtor, or on the initiative of the court,creditors' committee or individual creditor, discharges the trustee, if the trustee does not perform his obligations or with his action threatens the interests of the creditors or the debtor. This discharging is performed, because of the guilty acts of the trustee and it is obstacle for the person to continue to perform trustee functions. In the established case-law this option is applicable, when the trustee havecommitted a number of essential errors and there is systemic and durable non-performance of the trustee’s obligations, with significant adverse legal consequences for the bankruptcy proceeding, for the debtor or the creditors.However, taking in account that a lot of negative effects can occur for the trustee from the discharging, after the amendment the cases of appealing are examined in three instances, and the main purpose of this is to be created more possibilities for the trustee to protect himself.

2. Furthermore, the changes in the legislation affect on the figure of the temporary trustee and in particular his functions, related to the preparing the initial list of the creditors. After the amendment in Article 668, p. 1 of Commerce Act, in the creditors’s list shall be indicated, which of the creditors are related parties with the debtor and also which of the creditors are related parties with the debtor in the last three years, preceding the date, when petition for institution of bankruptcy proceeding has been filed. This obligation is directly related to the amendment in the provision of Article 670(2) of Commerce Act, which concerns the way of adoption a resolution on the first meeting of the creditors.

3. Along with the changes in the legislation a completely new figure is introduced – the assistant trustee. The requirements for his appointment and his functions are regulated in Chapter one, Section IIa of Commerce Act.The main function of the assistant trustee is to support the trustee in the performance of specific obligations in the bankruptcy proceeding.The assistant trustee will be appointed by the trustee by contract, but not appointed by the bankruptcy court, which means that the assistant trustee is not a body in the bankruptcy proceeding. However,for the assistant trustee’s appointment, according to Article 660(2) of Commerce Act, is required prior authorization from the bankruptcy, after a demand is submitted by the trustee with specifying the specific actions, that the assistant trustee will be performing. The Commerce Act does not restrict the number of the assistant trustees, which can be appointed in the bankruptcy proceeding, which means that, if there is a trustee demand and court authorization more than one assistant trustees can be appointed.

The requirements to the persons, who can perform the functions of assistant trustee are not much different from the requirements for the figure of the trustee. There is a requirement the assistant trustee to successfully pass a qualification examination. The only difference is related to the duration of the required experience in the respective profession, which has to be not less than two years.It’s not required for the assistant trustee to obtain insurance for the time for which he is appointed to serve as assistant trustee for the damages that might occur as a result of guilty non-performance of his duties.

4. Furthermore, there are changes in the rules for the convening of the first meeting of the creditors. There is new third subparagraph of Article 669 of Commerce Act, which provides that the meeting will not be convened if the debtor had not been reported for announcement in the Trade Register his annual financial statements for the last three years, before the date when the petition for institution of bankruptcy proceedings has been filed, and also if the debtor does not perform his obligation referred to Article 669 of Commerce Act and does not provide the temporary trustee with the business books or the business books are kept manifestly irregularly.

Those amendments have a practical focus. The main function of the first meeting of the creditors is to elect the trustee. In the meeting take part the creditors that are mentioned in the initial list of the creditors, prepared by the temporary trustee. In this stage of the bankruptcy proceeding, the presentment of the claims is still not ended, so the only sources, which can provide an information for the group of the creditors are the annual financial statements of the debtor and his business books. In the cases when the debtor has not been reported for announcement his annual financial statements and denies to give assistance with the provision of the business books (this concept shall be considered as the passive analytical accounts of the debtor), the preparing of the initial list of the creditors is impossible. Pursuant to the reasons of the amendment of the Commerce Act, those changes seek to accelerate the development of initial stage of the bankruptcy proceeding and ending the practices of convening numerous first meetings of the creditors, which leads delaying of the proceeding. The answer, which is given is the possibility, in some cases, the first meeting of the creditors not to be convened, and the temporary trustee to continue with performing his functions. The temporary trustee will prepare the lists of the creditors with allowed claims and after that the meeting of the creditors will elect the permanent trustee.  

In accordance with the requirement that the business books must be kept manifestly irregularly, in the case-law it’s established that the concept „manifestly” means keeping the business books in the way that there is no need for obtaining evidences for the fact that they are kept irregularly. The concept „irregularly” means non-compliance between the mentioned in the business books and the actual situation of the merchant. The business books are kept irregularly also when a creditor is not mentioned in them at all. It’s enough for the books to be kept irregularly for one creditor to be considered that the business books are kept irregularly at all.

The second fundamental change, related to the first meeting of the creditors is the excluding specific categories of creditors from the persons, who have a right to vote in the decision-making. Those are the creditors, which are related parties with the debtor had been related parties with the debtor in the last three years, preceding the date, when petition for institution of bankruptcy proceeding has been filed, and also the creditors that had acquired claims from related to the debtor parties for the same period. This rule applies also to the creditors, who had been related parties with the debtor for the part of the period of the last three years.

The aim of those amendments is to guarantee the providing of fair satisfaction of creditors in the bankruptcy proceeding. As it’s mentioned in the reasons for the amendments, one of the main aims is also to be restricted the possibility a creditor with related parties, who are mentioned in the merchant’s business books in one way or another, to determine the election of the permanent trustee. It’s important the trustee to be independent, because he has a wide range of functions in the bankruptcy proceeding.

III. The changes, related to the bringing action for declaratory judgement pursuant to Article 694 of Commerce Act.

First of all, the last amendment in the Article 694 of Commerce Act, achieves systematizing, in accordance with the numerous changes made after adopting the Part 4 in Commerce Act.

It is determined who are the procedural identified parties, who can bring action for establishment of the existence or non-existence of a claim in the first three subparagraphs of Article 694. The actions mentioned in Article 694 of Commerce Act are pursuant to the securities and the privileges, which can be contested separately.

Main amendment is the fourth subparagraph, which is related to the participation of the trustee in the proceedings instituted after an action for declaratory judgement has been brought. In the established case-law, including the case-law of Supreme Court of Cassation, the participation of the trustee in those proceedings was excluded independently or as a representative of the debtor. After the changes in the legislation the trustee is a participant in the proceedings instituted after an action for declaratory judgement has been brought independently, in the capacity of a party, authorized to perform public functions in the bankruptcy proceeding, but not as a representative of the debtor. In accordance with the powers of the trustee to contest the existence of a claim or to affect the interests of the creditors, submitting the existence of such claim, it must be concluded that the trustee must be constituted as a necessary joinder of the debtor.

In the new wording at Article 694 of Commerce Act the possibility a creditor with allowed claim or a creditor with contested claim to intervene as a third party – assistant of the debtor is included. According to the new fifth subparagraph, when a action is brought by the debtor or an action for establishment of the non-existence of a claim is brought by a creditor, another creditor can not bring the same action, but may intervene in the proceeding as a co-claimant before the end of the first case hearing.

Some of the aims of those amendments ate related to the ending of the possibility for conducting simulated proceedings, which can affect on the bankruptcy proceeding through alleged creditors, related to the debtor. Among the reasons of the Amending and Supplementing Act as a basis for the adopted amendments is mentioned the established practice that simulated proceedings, instituted after an action for declaratory judgement have been brought between the debtor and the alleged creditors, are conducted and the result of that and of the fact that the trustee has not been participated in the proceedings is the fact, that the alleged creditors have the majority of the claims. As result they have the opportunity to affect seriously on the development of the bankruptcy proceeding, but after the adopted changes in the legislation this practice will be ended.

The temporal effect of the provision of Article 694(4) of Commerce Act also has an importance. The Amending and Supplementing Act does not includes provisions, which determine his effect on the pending proceedings pursuant to Article 694 of Commerce Act.Therefore, the common rules for the temporal effect of the provisions must be applied. According to them, the provision of Article 694(4) of Commerce Act must be applied to the pending proceeding, so the trustee must be constituted in them. It’s important to take into account that pursuant to p. 6 from Interpretative Judgement № 1 from 09 December 2013 of Supreme Court of Cassation, if in the first-instance proceeding an necessary jointer, whose participation in the proceeding is obligatory, is not constituted, the appeal court has to invalidate the judgement of the court of first instance as in admissible and has to return the case for a new examination to the first instance court with participation of the necessary joinder.

Last but not least, among the changes are included the rules for the determining the amount of the state tax, which is required when an action for declaratory judgement is brought. After the amendment the amount of the tax is determined on one – fourth of the claim. The reduction of the amount of the state tax will stimulate the creditors to seek for protection of their claims by judicial proceedings.

IV. The new rule related to the conversion of the bankruptcy estate.

1. One of the changes is related to Article 717d, and extends the prohibition for acquiring property in the bankruptcy proceeding, To the group of debtor his representative, the trustee and the parties pursuant to Article 185 of Obligations and contracts Act the amendment adds the proxy and related to them parties. Those changes are an answer to the existing practice the debtor, circumventing the prohibition, to acquire back his property by related parties and also at lower prices.If some of the above mentioned parties participate in the sale, the proposed bid and the sale will be invalid. The main aim of the Commerce Act is to ensure better protection for the creditors in the bankruptcy proceeding.

2. Another change is related to Article 717e of Commerce Act, which provides the way of the price payment when a sale is completed.The time-limit for the payment is extended to seven days.There is a new rule, providing that when a buyer is a creditor with allowed claim (it should be taken into account that provision concerns a creditor with an undisputed claim, which is not a subject of pending proceeding)or a creditor with rights pursuant to Article 717n, the trustee prepares distribution account of the available amounts, in which he points what proportion of the price buyer has to pay for satisfying the claims of the other creditors and what proportion will be deducted from the claim of the creditor-buyer. Actually, the change is that the buyer is not obliged to pay the whole price and then to wait the part of the payment made in excess to be restored, which in the most cases coasts a long period of time. Another difference is that as oppose to other distribution accounts of the available amounts this specific account has to be prepared before the payment is made, because at first should be determined what proportion of the price must be paid.The mentioned amendments in Article 717e are aimed in synchronizing the legislation of the property conversion in the bankruptcy proceeding with the conversion in the public sales pursuant to Civil Procedure Code of the one side.Of the other side they are aimed to stimulate the interest of the creditors to participate in procedure of the property conversion.

3. There are changes in Article 717n, which provides the sales of secure property. The new wording says that when the sale includes property, which is mortgaged or pledged from the debtor for securing other’s debt or is acquired, encumbered with mortgage or pledge, the trustee has to send a notification for scheduling of the sale to the secured creditor. In the case, when the property is mortgaged or pledged from the debtor for securing other’s debt for the accepted payments the trustee has to prepare separate account for distribution, in which the amount of money, which has to be paid to the secured creditor, must be pointed. This amount of money will be handed over to the secured creditor, if he provides the trustee with an execution list for his claimer certify to the trustee that the secured claim is allowed in the bankruptcy proceeding of the person, which debt is secured with the sold property. When the creditor is secured with registered pledge – the creditor has to provide a registered pledge certificate from the register and declaration with notary certification of the signature for the actual amount of the secured claim.

The existing jurisprudence is conflicting.Because of the fact, that there wasn’t specific rule for preparing an account for distribution in case of sale of property, which secures other’s debt, the trustee was preparing an account for distribution, against which the secured creditor didn’t have the opportunity to put objections or to appeal against the ruling approving the distribution account and to protect his rights, or the trustee didn’t prepare a distribution account at all – in this case there was no way for the creditors to put objections against the payments to the secured creditors. The newly introduced obligation for preparing a separate distribution guarantees the rights of the secured creditor to put objection against the account and to appeal against the ruling  approving the distribution.

Furthermore, the adopted changes resolve another problem. If the secured creditor fails to procure with execution list against the debtor, for example because against the debtor there is instituted bankruptcy proceeding,it is enough for the secured creditor to certificate before the trustee that his secured claim is allowed in the other proceeding.

An attention deserves the question about the competition between the Commerce Act and the Registered Pledges Act, when the debtor’s property is a subject of registered pledge. In case there is instituted bankruptcy proceeding against the pledgor before the pledgee has entered opening to execution, the pledge can be satisfied only in the bankruptcy proceeding, and has to present his claim as the other creditors.If the pledge has entered the opening to execution pursuant to Registered Pledges Act before the bankruptcy proceeding against the pledgor is instituted, the pledgee has the opportunity to choose if he will be satisfied pursuant to Registered Pledges Act or in the bankruptcy proceeding.

4. After the changes in Article 718 of Commerce Act, which provides the rules for the sale in special cases, as a prerequisite for the sale’s implementation is mentioned a resolution of the meeting of creditors, so the trustee has to comply with this resolution his proposal to the court.In the case, it’s not a requirement for convening a meeting of creditors, which has to agree with or to give authorization for the sale pursuant to Article 718 of Commerce Act. The Article does not provide new specific power of the meeting of creditors in the stage of property conversion. For implementing the requirements of Article 718(1) of Commerce Act, it’s enough the meeting of the creditors, which is convened after the lists of allowed claims are approved, with agenda pursuant to Article 677(1), p. 8 of Commerce Act (making a resolution for determining the procedure and the method of conversion of the debtor's property into cash, the method and terms and conditions for property evaluation, the choice of evaluators and the determination of their remuneration) to express will. It’s necessary the meeting of the creditors to express will about providing the specific procedure of the sale if there are the prerequisites. If this meeting of creditors has not expressed will explicitly, it’s necessary a new one to be convened in the stage of property conversion, which has to make a resolution for sale in special cases. The provision of Article 718 of Commerce Act applies to pending proceedings too.

The new fourth subparagraph of Article 718 of Commerce Act explicitly refers to Article 717e(2) of Commerce Act, and it is also required a separate account for distribution to be prepared. If the buyer is a creditor with allowed and uncontested claim, the proportion that has to be deducted must be determined preliminary, and the provided 60-days time-limit starts from the date, when the account enters into force, because before that the amount of the payment of the creditor-buyer is not determined. 

V. Changes in the rules for appealing against the ruling of the bankruptcy courtapproving the distribution account.

There is a change in Article 729(3) of Commerce Act, which points the identified parties, which can appeal against the ruling of the bankruptcy court approving the distribution account. In the group of the parties, who can appeal the ruling is included also a creditor, who hasn’t put objection against the account, if the ruling of the court amends or revokes the distribution account.The idea is, that before the amendment in the Article the provision included the debtor, the creditors’ committee and a creditor, who has put an objection against the distribution account.According to the strict sense of the provision before the amendment, there was a conclusion that a creditor, who hasn’t put objection against the distribution account, doesn’t have the power toappeal against the ruling of the bankruptcy court. But the creditor doesn’t have an interest to put objection against the distribution account if the account provides payment to him. If however, subsequently the court modifies or precludes the payment, from the strict sense, the conclusion was that the creditor with the modified or precluded payment doesn’t have the power to appeal against the ruling.

VI. New rules in the completion of bankruptcy proceedings.

There are some changes in the last stage of the bankruptcy proceeding, which main aim is to guarantee the rights of the creditors.

First of all, there is a new second subparagraph of Article 735 of Commerce Act, that provides that the bankruptcy proceeding does not end, when the debtor’s debts are secured by securities of third parties and the enforcement proceeding against them are not ended or the debtor is a party in pending proceeding. One of the criticisms of the World Bank from November 2015was that the legislation doesn’t provides the possibility for the creditors to be satisfied from the securities of third parties, if the bankruptcy proceeding of the debtor is ended. With the redemption of the main debt, which is secured, the security rights are also redeemed because of their additional nature. So in the case of speedy conduction of the bankruptcy proceeding, the completion of the proceeding redeems the additional rights of the creditors, which affects on their interests.

In accordance with the above mentioned is the amendment in Article 739(2) of Commerce Act, which provides that the unsatisfied claims in the bankruptcy proceeding will not be redeemed in the cases, when there are securities by third parties for the unsatisfied claims.

Final wording:

After the changes in the Commerce act were introduced in the article, it can be concluded that those changes are made for achievement of specific objectives.The mentioned in the introduction of the article European acts and the recommendations of the World Bank establish clear guidelines before the Bulgarian legislator for what actions should betaken for improving the rules in the bankruptcy proceedings.The protection of the rights of the creditors, the rapid and efficient conducting of the proceeding and the possibility of satisfying as much as possible of the creditors’ claims are among the aims of the amendment. The newly added merchant stabilization proceedings, which are not subject of the article, are sufficient proof for the idea that the needs of the merchants, which have financial difficulties, also deserve attention and efforts grater certainty to be achieved and more possibilities for their stabilization to be found. Main importance for the proper interpretation of the changes has the necessity the changes to be assessed in accordance with the developing tendencies at a transnational level, which are aimed at creating minimum standards in different countries for guaranteeing the basic principles in conducting the bankruptcy proceedings and also in sharing experience and established efficient practices in the field of bankruptcy.

 

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