The Law on Bankruptcy (“Off. Herald of the Republic of Serbia”, Nos. 104/2009, 99/2011 – other law, 71/2012 – Decision of the Constitutional Court, 83/2014, 113/2017, 44/2018 and 95/2018) shall govern the manner and conditions of initiating and conducting bankruptcy proceedings against legal entities.
Bankruptcy proceedings, within the meaning of the Law on Bankruptcy, shall be [compulsory] liquidation and reorganisation.
Liquidation shall mean creditor satisfaction out of the value of entire assets of the bankruptcy debtor, or the sale of the debtor as a legal entity.
Reorganisation shall mean creditor satisfaction accomplished under the adopted plan of reorganisation by redefining relations between the debtor and the creditor or the debtor’s legal status, or in another manner provided for in the plan.
Authorised Petitioners for Initiating Bankruptcy Proceedings
The bankruptcy proceedings shall be initiated by the petition of the creditor, the bankruptcy debtor, or the liquidator.
Notwithstanding, the bankruptcy administrator may not initiate proceedings against business companies that are registered for the production of weapons and military equipment without prior approval of the ministry in charge of defense.
The creditor may initiate a bankruptcy proceeding in case of permanent insolvency of the debtor, or noncompliance with the adopted plan of reorganisation, or in case the plan of reorganisation entered into effect in a fraudulent or unlawful manner.
The bankruptcy debtor shall file the petition for bankruptcy if one of the following grounds for bankruptcy exists:
- if the bankruptcy debtor Is unable to pay its debts within 45 days of the date they become due
- if the bankruptcy debtor has completely ceased all payments for a consecutive period of 30 days.
The liquidator shall file the petition for bankruptcy in cases prescribed by legislation governing the legal status of companies.
The Form and Content of the Petition to Open Bankruptcy
The petition to open bankruptcy proceedings shall be filed with the appropriate court.
The petition to open bankruptcy proceedings shall include:
- Name of the court to which the petition is submitted
- Company name or name and address of the petitioner, or address of the person authorised to receive court papers and represent the petitioner
- Company name of the bankruptcy debtor and the information about its contact address
- List of bankruptcy and other creditors, along with claim amounts and justification, as well as names and addresses of company stakeholders liable for the debtor’s obligations with their assets if the petitioner is the bankruptcy debtor
- Facts and accompanying documentation proving type, grounds, and amount of outstanding claim if the petitioner is a creditor
- The list of documents attached to the petition for bankruptcy proceedings.
If bankruptcy proceedings are initiated on the proposal of a creditor, a proposal for initiating a bankruptcy procedure may also contain a proposal for appointing a bankruptcy administrator from the list of active bankruptcy administrators for the area of the competent court (name and surname of the proposed bankruptcy administrator and license number).
Treatment of Inaccurate and Incomplete Bankruptcy Petitions
If the petition for initiating bankruptcy proceedings does not include all elements stipulated by the law, the bankruptcy judge shall give a notice thereof to the petitioner and set a deadline of no more than eight days, within which period of time the petitioner shall be required to correct the petition and remove the identified deficiencies.
If the petitioner fails to comply with the court order, the bankruptcy judge shall reject the petition for bankruptcy by its ruling in the form of the decision. In this case, the petitioner shall bear the expenses of the proceeding.
Withdrawing the Petition for Bankruptcy
The petition for bankruptcy may be withdrawn until the notice on the opening of the bankruptcy proceedings is posted on the court’s bulletin or electronic bulletin board, or until the decision to reject or to refuse the petition for bankruptcy is rendered.
If the petitioner withdraws the petition for bankruptcy, the bankruptcy judge shall suspend the proceeding and the petitioner shall bear the expenses of the proceeding.
Reimbursement of Expenses
Within five days from receiving the court order, the petitioner shall be obliged to pay an advance to cover the costs of advertisements and of notifying in writing, all creditors known at the time of the opening of the bankruptcy proceeding, providing all data referred to in the decision to open the bankruptcy proceeding and other data of importance for creditors, cost of engaging a bankruptcy administrator, as well as funds necessary to secure the assets, in the amount set by the bankruptcy judge, as well as costs of the registration of information on bankruptcy in the registers kept by the organization responsible for maintaining the register of business entities, in accordance with the regulations that determine the type, amount and manner of payment of fees for registration and other services provided by the organization responsible for maintaining the register of business entities.
If the petitioner does not make the advance payment within the stipulated time period, the bankruptcy judge shall reject the petition for bankruptcy proceedings.
The amount of the advance is determined depending on the classification of a legal person as a micro, small, medium or large legal person, in accordance with the regulations that govern the criteria for classifying legal persons, and may not be higher than:
- 50,000 dinars for micro legal persons
- 200,000 dinars for small legal persons
- 600,000 dinars for medium legal persons
- 1,000,000 dinars for large legal persons.
The advance shall be considered an expense of the bankruptcy proceeding and it shall have the priority settlement from the bankruptcy estate, immediately upon establishing that the expenses secured by advance may be settled from the remaining funds of the bankruptcy estate, unless the bankruptcy judge determines that the petition is without proper grounds and that conditions for initiating the bankruptcy proceeding do not exist, in which case the incurred expenses shall be covered, upon the court’s order, from the amount paid in advance upon the court’s order.
If the incurred expenses are higher than the amount paid in advance upon the court’s order, the petitioner whose petition for bankruptcy proceeding was rejected shall be obliged to reimburse the difference in these two amounts within eight days from the receipt of the court order to pay.
If the petitioner fails to pay the difference within the set deadline, the bankruptcy judge shall suspend the proceeding and all incurred expenses shall be borne by the petitioner.
If the bankruptcy proceeding is opened, the expenses of the proceeding shall also include expenses of the preliminary bankruptcy proceeding, as well as the expenses of enforced liquidation initiated in accordance with the law governing privatisation.