Below is a detailed summary of the strengths and weaknesses in existing insolvency regulations in four areas: commencement of proceedings, management of debtor’s assets, reorganization proceedings and creditor participation.
| Answer | Score | |
|---|---|---|
| Commencement of proceedings index (0-3) | 3.0 | |
| What procedures are available to a DEBTOR when commencing insolvency proceedings? | (a) Debtor may file for both liquidation and reorganization | 1.0 |
| Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor? | (a) Yes, a creditor may file for both liquidation and reorganization | 1.0 |
| What basis for commencement of the insolvency proceedings is allowed under the insolvency framework? | (c) Both (a) and (b) options are available, but only one of them needs to be complied with | 1.0 |
| Management of debtor's assets index (0-6) | 2.0 | |
| Does the insolvency framework allow the continuation of contracts supplying essential goods and services to the debtor? | No | 0.0 |
| Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts? | No | 0.0 |
| Does the insolvency framework allow avoidance of preferential transactions? | Yes | 1.0 |
| Does the insolvency framework allow avoidance of undervalued transactions? | Yes | 1.0 |
| Does the insolvency framework provide for the possibility of the debtor obtaining credit after commencement of insolvency proceedings? | No | 0.0 |
| Does the insolvency framework assign priority to post-commencement credit? | (c) No priority is assigned to post-commencement creditors | 0.0 |
| Reorganization proceedings index (0-3) | 3.0 | |
| Which creditors vote on the proposed reorganization plan? | (c) Other, please specify | 1.0 |
| Does the insolvency framework require that dissenting creditors in reorganization receive at least as much as what they would obtain in a liquidation? | Yes | 1.0 |
| Are the creditors devided into classes for the purposes of voting on the reorganization plan, does each class vote separately and are creditors in the same class treated equally? | Yes | 1.0 |
| Creditor participation index (0-4) | 1.0 | |
| Does the insolvency framework require approval by the creditors for selection or appointment of the insolvency representative? | No | 0.0 |
| Does the insolvency framework require approval by the creditors for sale of substantial assets of the debtor? | No | 0.0 |
| Does the insolvency framework provide that a creditor has the right to request information from the insolvency representative? | No | 0.0 |
| Does the insolvency framework provide that a creditor has the right to object to decisions accepting or rejecting creditors' claims? | Yes | 1.0 |
Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”.