insolvency developments in transition countries michel nussbaumer, chief counsel legal transition...
TRANSCRIPT
Insolvency Developments
in Transition Countries
Michel Nussbaumer, Chief Counsel
Legal Transition Programme
Thursday 23 October 2014
3
Focus areas for EBRD policy dialogue
Secured
transactions
Infrastructure
regulation
Concessions/PPP
Insolvency
Corporate
governance
INVESTMENT
Securities
markets
Judicial
capacity
Public
procurement
4
EBRD Approach to Insolvency
The EBRD virtuous circle of legal reform
STANDARD SETTING
Preparing and promoting
international standards of best
practice
STANDARD SETTING
Preparing and promoting
international standards of best
practice
ASSESSMENT WORK
Assessing quality and effectiveness of legal systems
ASSESSMENT WORK
Assessing quality and effectiveness of legal systems
OUTREACH
Disseminating the experience gained so as to stimulate
future reforms
OUTREACH
Disseminating the experience gained so as to stimulate
future reforms
COUNTRY PROJECTS
Providing technical cooperation to
countries of operations
COUNTRY PROJECTS
Providing technical cooperation to
countries of operations
5
Next outreach event
Agenda
This invitation only, interactive workshop explores the role of the insolvency office holder and draws on the results of the EBRD’s 2013-2014 comparative assessment into the insolvency office holder profession in 27 of the jurisdictions.
Issues covered will include:
• What is most effective model for regulation?
• How can the best candidates be incentivised to become insolvency office holders?
• On what basis should office holder fees be determined and by whom?
• How effective are office holders at recovering assets from the debtor’s estate?
• What is the role of the courts in managing insolvency cases (and insolvency professionals)?
• How autonomous are insolvency office holders in practice?
• To what extent is the profession truly indispensable?
7
Insolvency Law Developments in the EBRD Region
Reorganisation
InsolvencyInsolvency
Pre-insolvency Pre-insolvency
Trend No 1: Encouraging reorganisation
8
Insolvency Law Developments in the EBRD Region
Trend No 2: Strengthening “cram down” procedures
Definition of cram down: Any procedure through which a debtor and/or the majority of its creditors (or a class of creditors) can drive the acceptance of a composition plan despite the objections of a dissenting minority of creditors
Issue: how do you treat secured creditors?
9
Insolvency Law Developments in the EBRD Region
Trend No 3: “Tackling the Non-Performing Loans Problem”
NLPs as a percentage of total loans as of Q2 2013
Source: CESEE Bank Lending Survey, EIB, December 2013.
0%
5%
10%
15%
20%
25% 24.0%
13.5%
17.1%15.1%
21.00% 19.9%
NP
Ls i
n t
ota
l lo
an
s (
in %
)
10
EBRD Insolvency Office Holder Assessment
• 27 countries covered by the assessment
• Little comparative research to date
• Examined seven “pillars” of the profession• Authorisation to act
• Qualification and training
• Regulation, supervision and monitoring
• Work standards and ethics
• Powers and duties
• Appointment system
• Remuneration
• Insight into role and activities of key players in insolvency frameworks: court, creditors and office holders
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EBRD Insolvency Office Holder Assessment
• Group 1 countries (self-regulation)
• Group 2 countries (regulation by a dedicated body for IOHs/ bankruptcy)
• Group 3 countries (regulation by a government ministry)
• Group 4 countries (no real regulatory presence)
13
Conclusion/ Points for Discussion
• High level of insolvency law reform in Western Europe and in the EBRD Region
• Common theme: reorganisation and greater opportunities for business rescue
• Specific challenges for transition countries: weak judicial capacity, developing profession of insolvency office holders and lack of cooperation and trust within the banking sector
• EBRD goal: to help build a restructuring culture