Amendments in the Banks Insolvency Act

On 26 November 2014, the Amending Bill to the 2014 State Budget Act of the Republic of Bulgaria proposed by the Council of Ministers was adopted at second reading by Parliament. The proposals of the Ad Hoc Parliamentary Committee for Budgets and Financial Affairs to amend the bill were taken into consideration and adopted in the course of the voting procedure. One of the new provisions,i.e. §9, envisages amendments to paragraph 5 and insertion of a new paragraph 6 in Article 59 of the Banks Insolvency Act. The new provisions introduce partial invalidity of the nettings between accounts receivable and debts in case the bank has been placed under special supervision in accordance with the Credit Institutions Act. These nettings will be valid only to the amount which the person would receive from the insolvency mass in his capacity of a creditor. The amendments make it explicit that this issue is to be decided after the final settlement in the distribution of the insolvency mass.