New Bankruptcy Law brings much needed changes
Yes, another new law is about to enter into power as of September 1st, and if you have a company or trade you will definitely be interested in the news it will bring.
The new bankruptcy law is quite significant and very detailed since it has 446 articles and it will replace the old, 18 and a half year old law which went through 7 changes and additions during that time. Its aim it to achieve faster, more efficient and more transparent implementation of bankruptcy given that, at the moment, Croatia is 24th out of 28 EU countries when it comes to duration of the bankruptcy.
According to this new law, any legal person with an account which has been blocked for more than 120 days, and at the moment there are more than 20 000 such cases, will automatically go into bankruptcy while any company that is not paying out wages for more than three months will also find it on the road to bankruptcy. In both cases, proceedings will be initiated by the Financial Agency (FINA).
According to FINA’s data, out of 22 754 legal entities with blocked accounts (data from June 30), 19 646 of them or 86,3% have been blocked for over 120 days and their unpaid bills amount to 19,2 billion kuna. Those companies have 10 139 employees all together. Among legal entities with accounts that have been blocked for more than 120 days more than 3/4 or 15 001 don’t have a single employee and their debt is 14,4 billion kuna.
Since the number of companies for which FINA will have to implement a bankruptcy procedure is quite overwhelming, new law will also regulate the order in which the process will be performed so the first ones on the agenda will be those companies without employees and with accounts that have been blocked for more than 1000 days followed by companies that have been blocked from 360 to 1000 days and only after that company with employees.
