Review of the profession in the EBRD region


Insolvency systems have received increasing attention in recent years in response to the problems caused by the financial crisis. As a bank and equity investor, the European Bank for Reconstruction and Development (the EBRD) recognises the importance of a functioning insolvency and restructuring framework for businesses in financial difficulties and for transition countries’ economies.[1]

A sound legislative basis or set of laws governing insolvency is fundamental. Nevertheless an insolvency system also requires professionals with specialist legal, financial and commercial expertise, who are able to perform the various tasks associated with managing a financially distressed or insolvent business. These professionals include judges, lawyers, accountants and insolvency office holders (IOHs), as well as a developing profession of turnaround experts.

Known in some jurisdictions as “administrators”, “liquidators” or “trustees”, IOHs are central figures in most insolvency systems, which typically require the partial or total divestment of the debtor’s management powers and the appointment of an insolvency office holder to administer or liquidate the assets of the debtor.[2] In reorganisation proceedings where the debtor’s management remains in place, the office holder often supervises management’s administration of the debtor’s affairs. This proximity to the debtor means that IOHs are frequently responsible for keeping the court, creditors and other stakeholders informed of the progress of the insolvency case.

The powers and duties of the IOH vary according to the objective of the insolvency procedure. The IOH in liquidation proceedings is focused on sale of the business and/or assets and distribution of proceeds, while the IOH in reorganisation proceedings will often take over management of the debtor’s business and prepare or assist in the preparation of a reorganisation plan. How well the IOH administers these tasks can be critical in terms of the financial outcome for creditors and, in some cases, continuation of the debtor’s business.

Notwithstanding the importance of IOHs, little comparative research has been done on the profession until recently.[3] In 2012 the EBRD embarked on a study (the assessment) of the IOH profession in its region with the aim of evaluating both the profession’s relative development and the legal and regulatory framework applicable to IOHs. This e-book contains the main results of the assessment, including individual country profiles summarising the key strengths and weaknesses of the IOH profession in each of the countries assessed.

We hope that the assessment report will provide a useful source of information on insolvency office holders and will serve as a reference point for policy makers and stakeholders with an interest in further development of the profession.


The EBRD would like to thank all those who participated in the assessment and responded to the questionnaire, including insolvency office holder regulators, ministries, insolvency practitioners, bank representatives and legal professionals. The time and commitment offered by all participants greatly contributed to the overall value of this report.

The EBRD would like to extend its special thanks to those law firms listed at Annex 1, which provided invaluable input and commentary on section 4 and the individual country profiles. Special thanks are also due to the University of Nottingham which assisted the EBRD with the pilot assessment.

The assessment forms part of the work of the Legal Transition Programme administered by the Office of the General Counsel and was led by Catherine Bridge, Principal Counsel and Bettina Bognár, Legal Research Associate, under the guidance of Frederique Dahan, Lead Counsel.

This report is dedicated to Professor Ron Harmer, a long-standing consultant and friend of the EBRD, who made an invaluable contribution to this assessment and who sadly passed away in November 2013.

[1] The term “bankruptcy” is frequently used within the EBRD region as an alternative to the term “insolvency” and sometimes as a synonym for “liquidation”. For consistency, we refer to “insolvency” throughout this report.

[2] See the definition of “liquidator” in Council Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings, Article 2(b).

[3] One recent research project (the Leiden University Report) has examined European principles and best practices for insolvency office holders, with the aim of developing a common set of principles and best practices for the profession in Europe.