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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.
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There will always be “winners” and “losers” in a market economy, which entails constant competition between companies for access to limited resources. The loser in this case is a company that is unable to pay its financial obligations on time and thus becomes insolvent.
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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.
![](https://iset-pi.ge/site_images/date.png)
Georgia’s new insolvency law – the Law of Georgia on rehabilitation and the collective satisfaction of creditors’ claims – became effective on 1 April 2021. Under which, if a business operating in Georgia has reached a low ebb and is no longer able to meet its financial obligations, it has the opportunity to regulate relations with creditors based on new legislative instruments – effectively, it is able to rehabilitate and return to the market in a viable manner, or, if necessary, it might declare bankruptcy and exit the market.
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If you are an undergraduate student of an accredited higher education institution or a student of a vocational education institution in Georgia and ongoing economic reforms in the country interest you, this call is for you!