Reaching European and international standards of insolvency proceedings is considered one of the most important priorities of the Georgian authorities and its international partners for creating enabling business environment and fostering sustainable growth and job creation in the country.
A fundamental piece of legislation that governs the relationship between parties in insolvency proceedings, the Law on Insolvency Proceeding, was enacted in 2007. A number of amendments have been made to the 2007 law in an attempt to align with international best practices, however, existing legislation and practice fail to fulfill their function as evidenced by international rankings and assessments. In 2014, GIZ, European Bank for Reconstruction and Development (EBRD), and Governing for Growth in Georgia (G4G) assessed the insolvency regime in Georgia and provided recommendations to alter both the law and the overall insolvency system.
In close cooperation with the Ministry of Justice of Georgia and the National Bureau of Enforcement, GIZ established a working group that started to work on the new law on insolvency proceedings. The working group was composed of the representatives of the Ministry of Justice of Georgia, the National Bureau of Enforcement, the Ministry of Economy and Sustainable Development of Georgia, and the Ministry of Finance of Georgia, four prominent lawyers with extensive experience in handling insolvency cases, representative of the Investors Council and German experts, who have provided recommendations for a policy change and a reform proposal. In June 2018, the working group finalized the elaboration of the draft – Law on Rehabilitation and Collective Satisfaction of Creditors (the “Draft Law”) and launched the consultation phase. Key stakeholders have been invited to present their concerns and assessments of the proposed piece of legislation.