Parliament adopts new Bankruptcy Act

Zagreb - The Croatian Parliament on Friday adopted a new Bankruptcy Act which will allow the launching of bankruptcy proceedings by default in companies whose bank accounts have been blocked for more than 120 days.

Also adopted, however, was a government-sponsored amendment under which the new bankruptcy regulations would go into force in September.

The government moved this amendment after the Opposition warned that under the new law, the Institute of Immunology would by default undergo bankruptcy proceedings, given that one of the legal reasons for filing for bankruptcy was the nonpayment of monthly wages for more than three months. Under the new law, employees of such companies would receive allowances from a fund. The law also enables an easier sale of disused properties and the continuation of work under certain conditions. The new law also includes regulations on pre-bankruptcy settlements which in the future will fall under the jurisdiction of courts, which is expected to secure better protection for creditors and prevent excessive claims.

The Opposition criticised the fact that the government had intervened in the text of the law with as many as 14 amendments which were submitted after the expiration of the deadline for the submission of amendments, which prevented parliamentary deputies to react.

Author: Hina