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Bankruptcy Law
Framework for a reformed 1998 bankruptcy law has been underutilized and thus, never fully implemented by the courts. Many insolvent companies continue to be operated rather than liquidated. In Macedonia, reorganization and liquidation of insolvent enterprises tends to be less frequent than desired. In addition, medium and large seized enterprises are rarely liquidated in Macedonia in terms of a wholesale sale of assets and closure of the business. Such an enterprise, however, might be sold as a going concern rather than reorganized under existing management.
The World Bank has indicated that it would like the large state-owned and socially owned enterprises to be sold or closed in an effort to end the privatization imitative.
In response, the Macedonian government is taking the lead in addressing the problems in 12 large loss-making enterprises that either remain in majority public ownership or that will revert to public ownership because of non-payment of privatization installments by the current owners. The plan is to restructure and sell the enterprises to strategic investors Those that cannot be sold will be liquidated.
There appears to be a robust market for legislative reform in the bankruptcy area. The legal profession and judges, as the main implementers of bankruptcy law, both advocated for amendments to existing law and participated actively in the amendment process. In addition, the MBA has been an active professional associating which has provided education and outreach about reorganization as an alternative to liquidation.
(Note: This information was taken from the Bankruptcy chapter of the 2000 Macedonia BizCLIR report. For more information, please see the report.)
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