Prior to the current Insolvency Reform, Georgia’s legislative framework regulating insolvency proceedings fell short of meeting international standards – it did not meet neither creditors’ nor 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”1. The law introduces several innovative mechanisms, modifies institutional setup regulating insolvency proceedings, and ensures that the insolvency process is smooth and efficient.
Insolvency reform is one of the target reforms selected under the ReforMeter project. On December 20, 2022, ReforMeter hosted the 2nd Public-Private Dialogue (PPD) on Insolvency reform, where the reform's implementation in practice was overviewed. Based on the PPD event, the given report summarizes the progress of the Insolvency reform.