Note: ReforMeter has conducted insolvency reform assessment three times: Phase I – 2022, Phase II – February 2023, and Phase III – October 2023.

Before the current insolvency reform, Georgia’s legislative framework regulating insolvency proceedings fell short of meeting international standards – it did not meet either creditors’ or debtors’ needs and failed to offer incentives to the insolvent companies to choose rehabilitation as their optimal strategy for resolving financial difficulties. To address such barriers, after multisectoral and thorough deliberations, the new law on “Rehabilitation and Collective Satisfaction of Creditors’ Claims” was enacted in Georgia and has been in force since April 2021. As its name suggests, the main goal of the new law is the collective satisfaction of creditors through achieving the company’s rehabilitation, “and where the rehabilitation cannot be achieved, through the distribution of proceeds from the sale of an insolvency estate”. The law introduces several innovative mechanisms, modifies institutional setup regulating insolvency proceedings, and ensures that the insolvency process is smooth and efficient. The progress of the insolvency reform is monitored periodically by the ReforMeter. The findings of the third consecutive public-private dialogue on insolvency reform are detailed in the current report.