Best Restructuring & Insolvency Lawyers in Bosnia and Herzegovina

About Restructuring & Insolvency Law in Bosnia and Herzegovina

Restructuring and insolvency law in Bosnia and Herzegovina governs the processes by which financially distressed companies or individuals reorganize their debts, assets and business structure, or, if this is not possible, undergo orderly liquidation. The primary goals are to provide fair outcomes for creditors, maximize the value of assets, and support economic stability. The procedures are regulated by specific statutes that apply separately in the Federation of Bosnia and Herzegovina, Republika Srpska, and the Brčko District, each with its own legal framework. The law addresses both voluntary and involuntary proceedings, ensuring that both debtors and creditors have a structured process for resolving insolvency related issues.

Why You May Need a Lawyer

Navigating restructuring or insolvency can be complex and intimidating. Common situations where legal assistance is crucial include:

• Reviewing your company’s financial situation and advising on legal options
• Initiating or responding to insolvency proceedings
• Reorganizing company structures to avoid insolvency
• Negotiating settlements or repayment plans with creditors
• Representing your interests in court during insolvency or bankruptcy hearings
• Securing or contesting claims against insolvent estates
• Protecting directors and managers from liability arising from insolvency
• Handling cross-border insolvency cases involving foreign creditors or assets

A specialized lawyer ensures that legal requirements are met, deadlines are observed, and your rights are protected throughout the process.

Local Laws Overview

Restructuring and insolvency processes in Bosnia and Herzegovina are primarily governed by the Law on Bankruptcy Proceedings of the Federation of Bosnia and Herzegovina, the Law on Bankruptcy in Republika Srpska, and the Law on Bankruptcy of the Brčko District. Significant aspects include:

• Commencement of Proceedings: Bankruptcy can be initiated by the debtor or by creditors if payment obligations are not met.
• Moratorium and Stay: Once proceedings are initiated, creditors are generally barred from taking individual enforcement actions against the debtor’s assets.
• Appointment of Bankruptcy Trustee: The court appoints a trustee responsible for managing the debtor’s assets and affairs during proceedings.
• Court Control: The process is overseen by specialized commercial courts, with various mandatory hearings and reporting requirements.
• Restructuring Plans: In certain cases, companies can propose reorganization plans to restructure debt and operations, subject to creditor approval and court confirmation.
• Creditors' Rights: Creditors must submit claims within set deadlines and can participate in creditor committees.
• Asset Distribution: The trustee liquidates assets and distributes proceeds according to statutory priorities.
• Legal Challenges: Both debtors and creditors can challenge decisions or raise objections during the process.

It is important to understand that each entity within Bosnia and Herzegovina may have some variations in its specific legal procedures, timeframes, and court organization.

Frequently Asked Questions

What is the difference between restructuring and insolvency?

Restructuring refers to reorganizing a company’s debts or business structure to restore financial stability. Insolvency occurs when a debtor cannot meet its financial obligations, often leading to bankruptcy proceedings.

Who can initiate insolvency proceedings in Bosnia and Herzegovina?

Both debtors and creditors can initiate insolvency or bankruptcy proceedings if certain financial criteria are met, such as inability to pay debts when due.

How long does a typical bankruptcy process take?

The duration varies significantly depending on the complexity of the case, but most bankruptcy proceedings last from several months to a few years.

Will my company be forced to close if insolvency is declared?

Not necessarily. In some cases, restructuring plans allow continued operation, while in others, liquidation and closure may be unavoidable.

Can individuals go bankrupt in Bosnia and Herzegovina, or is it just for companies?

While most procedures target companies, individuals can also be subject to bankruptcy in specific circumstances, particularly if they are entrepreneurs or have significant business debts.

What happens to employees during bankruptcy?

Bankruptcy law provides protections for employees, including priority in receiving unpaid wages and certain social security contributions.

How are creditors paid during bankruptcy?

Creditors are paid in accordance with statutory priority lists, starting with secured creditors, then employee claims, taxes, and unsecured creditors.

Is it possible to stop bankruptcy proceedings after they have started?

Yes, if the debtor and creditors reach a settlement or if the financial situation improves and the court approves. However, this depends on the specific circumstances and timing.

Can foreign creditors participate in bankruptcy proceedings?

Yes, foreign creditors have the same rights as domestic creditors to file claims and participate in proceedings, subject to certain formalities.

Do I need a lawyer, or can I handle bankruptcy myself?

While representation is not always legally required, the complexity and high stakes of bankruptcy proceedings mean that having a qualified lawyer is highly recommended.

Additional Resources

Several governmental and professional organizations can assist those dealing with restructuring and insolvency in Bosnia and Herzegovina:

• Commercial Courts in the Federation of BiH, Republika Srpska, and Brčko District
• Ministry of Justice of the Federation of Bosnia and Herzegovina
• Ministry of Justice of Republika Srpska
• Association of Bankruptcy Trustees of Bosnia and Herzegovina
• Chambers of Commerce in both entities

These bodies can provide official information, referrals to trustees, and updates on relevant procedures.

Next Steps

If you are facing financial distress or insolvency, consider taking the following actions:

• Gather all relevant information about your financial position and debts.
• Contact a specialized restructuring and insolvency lawyer to review your situation and discuss options.
• Consult official resources or governmental bodies for procedural guidance.
• If recommended, prepare to initiate restructuring plans or insolvency proceedings to protect your interests.
• Stay informed of deadlines and ongoing obligations throughout any legal process.

Acting quickly and seeking professional legal advice will help you understand your rights and responsibilities, allow for better decision making, and improve the possibility of a successful outcome during restructuring or insolvency in Bosnia and Herzegovina.