Handling zero or minimal asset cases
A request from Serbia who are seeking the help of fellow IAIR members in terms of handling zero or minimal asset cases.
We are analysing options how to deal the issue of zero or minimal asset cases.
Actually, we have numerous zero and minimal asset cases in Serbia, and we (will) face lack of new insolvency office holders due to no adequate remuneration system in those cases.
Those considering setting up insolvency office are demotivated because they must deal with the expenses of handling cases with no remuneration.
Consequently, the profession will suffer without newcomers, that is for sure.
We would be grateful if you could advise how this problem is solved in your jurisdiction, what is the funding plus remuneration system and if you could share supporting documents for the better understanding of your solution.
Thank you in advance.
Regards from Belgrade,
Jelena Todic
Director of the Supervision and Profession Development Unit at Bankruptcy Supervision Agency Republic of Serbia
Malta also asked if other members came across with the followings:
1. Pursuant from Companies Law, the liquidator is obliged to pay to the competent authority a fee of 3% for any income is being realized from the liquidation process. This, as a principle, is being implemented as well on cases that they continue to have income from operations, which however are not necessarily part of the liquidation process (e.g. liquidation of company's assets). For example, companies that continue to operate with court order, such as farms, supermarkets, etc. Companies that need to handle their stock, assets, etc in a special way in order to maximize the dividend to the creditors. Besides that, there are also credit institutions that went bankrupt and the liquidator has to transfer back deposits from other institutions. The liquidator is forced by law to pay to the Department the above-mentioned fee. However, this does not work neither to the best interest of creditors, nor the liquidator. Before we proceed with any legal amendments, it would be interesting to know, whether any other member of the IAIR faced similar issues and how they dealt with them. Before we proceed with any legal amendments, it would be interesting to know, whether any other member of the IAIR faced similar issues and how they dealt with them.
2. Also, another impediment we often face and hinders the swift and prompt conclusion of the liquidation process is mortgage or other claims on properties or assets, which prevents the liquidation of assets. In these cases, the secured creditor does not waive his right on the secured property or asset and as a result the process remains on hold and no dividends can be paid to the rest of creditors. How do the other members proceed with these kinds of cases or what is the practice that is being followed in their countries, regarding properties which are part of the liquidation process and yet they have mortgages or other claims?