A New Law on Bankruptcy
A new draft law on bankruptcy is under examination in the Albanian Parliamentary Committees. The new proposed law contains 210 articles and 11 chapters. e scope of this draft is to set common binding rules, to facilitate the resolution and settlement of debtor liabilities in and/or out of the bankruptcy proceedings.
In contrast to the previous law, the new draft law has included a subchapter of defˇnitions defˇning terms only for purposes of this law.
One of the major novelties of the new draft law is the new priority ranking for settlement of liabilities before and after distribution. e draft law has added a new article regarding the ranking of claims, where the distribution of estate starts to satisfy the secured claims up to the value of the property used as collateral; the following priority of preferential creditors' claims is provided as below stated:
- Claims arising from the termination of the employment contracts up to 3 months before submitting the request for commencement of bankruptcy, including salaries and health reimbursements, maternity leave payments, which shall not exceed in total ALL 500 000;
- Support and maintenance claims arising prior to the commencement of the bankruptcy proceedings, when the debtor is an individual;
- Claims of debtor's employees for health damages caused during the work;
- Claims for unjust actions arising as a result of a damage caused to life or health from the debtor before the commencement of bankruptcy proceedings;
- Claims for unpaid tax liabilities a year before the request for the commencement of bankruptcy proceedings. e ranking continues with unsecured creditors, fˇnal creditors, and claims of partners, shareholders, founder or other members of debtor.
Some of the other changes introduced by the new draft law include the followings:
- Expansion of the range of entities subject to bankruptcy;
- Expansion of the range of the monitoring authorities, such as to include and increase the role of the Prosecutor, the Supreme State Control or supervisory authorities of different sectors of public interest;
- The clarification of the role of persons with supervisory tasks during bankruptcy proceedings. Remuneration of the bankruptcy administrator in two parts.
- From the procedural standpoint, bankruptcy law will be preferred as the only law regulating this procedure. This will be followed by changes to the tax related legislation.
Changes to the Law on Securing Charge
The new draft law on some changes and additions to the law on securing charge is under the examination in the Parliamentary Committees. The proposed changes aim to address the legal gap created with the changes introduced with law 132/2013.
Therefore, the new amendment intends to reinstate once again the concepts repealed with law 132/2013 and so to bring back the law on securing charge almost to the original version In light of the above, such concepts as 'intangible property', 'titles', 'fˇnancial instruments', 'accounts' are reintroduced not only in the defˇnition section but also in the main body of the law.
Therefore, according to the draft law, the law governs any transactions, whatever its form or denomination is, that creates a securing charge over movables things, intangible property, or rights of their owner, by transfer of ownership, by possession such as in the case of a pledge or otherwise.
According to the proposed changes, the validity, the perfection, and priority of a securing charge over a collateral which is an account, fˇnancial instrument or money and that is perfected through registration are governed by the law of the country where the chargor is located at the time when the securing charge attaches. Whereas, the validity, the perfection, and priority over a fˇnancial instrument or money in the possession of the chargee, is governed by the law of the state where the collateral is located at the time when the securing charge attaches.
Changes to the Civil Procedure Code
A new draft law on some additions and changes to the Civil Procedure Code is under review in the Albanian Parliamentary Committees.
Some of the changes to the Civil Procedure Code aim to align it provisions with the new draft law on bankruptcy. With the proposed changes, as an additional task to the special sections which are created at the district courts for the trial inter alia of commercial disputes, it is added also the trial of bankruptcy cases.
The major changes of the Civil Procedure Code are related to the mandatory enforcement procedures. More clarity is expected to be introduced with regard to the executive order issued by the court, calculation of the late payment interest, rules on payment of the tariff for enforcement of the executive title, appraisal of the value of the seized objects, etc.
One of the most important amendments is imposing statutory limitation period within which the debtor may request to the court to declare the invalidity of the executive title or that the liability does not exist or that it is extinguished. Accordingly, the limitation period for ˇling such requests is 30 days from the day the debtor was informed on the commencement of the mandatory enforcement.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.