Economics

The draft of the new Bankruptcy Act will be complete by the end of the year, business daily Világgazdaság reported. The new law is aimed to offer creditors a better chance to recuperate losses, leave room for the reorganization of companies with serious liquidity problems and make liability issues transparent - functions that the current Bankruptcy Act fails to fulfill. While in theory bankruptcy laws are intended to address the financial problems of a company before they grow out of proportion, 90% of liquidations in Hungary start against companies entirely stripped of assets and less than 1% of collectibles can be claimed. The bill defines a condition of ?perilous insolvency" in which the management will be under obligation to report to authorities. (Vg 5) P.P.

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