Insolvency and Bankruptcy in Georgia: What Creditors and Businesses Should Know

Financial difficulties do not always mean the end of a business. Georgian insolvency law provides legal mechanisms for either rehabilitating a financially distressed company or, where recovery is no longer realistic, proceeding through bankruptcy.

For creditors, insolvency proceedings can also be an important tool when a debtor is no longer able to meet its obligations and ordinary debt collection or enforcement measures are ineffective.

Rehabilitation or Bankruptcy?

Rehabilitation is designed to preserve a viable business, restructure its liabilities and restore financial stability.

Bankruptcy is generally used when rehabilitation is not feasible and the debtor’s assets must be realised and distributed among creditors according to the priorities established by law.

For both creditors and debtors, timing is critical. Insolvency proceedings involve strict procedural deadlines, creditor claims, secured assets, enforcement measures and important decisions regarding the future of the business.

Protecting Your Rights in Insolvency Proceedings

Creditors should carefully monitor insolvency proceedings and ensure that their claims are correctly recognised and properly supported by evidence. Depending on the circumstances, creditors may also participate in creditor meetings, vote on important decisions and protect mortgage, pledge and other security rights.

Debtors, on the other hand, should seek legal advice at an early stage in order to assess whether restructuring and rehabilitation remain realistic options.

Insolvency Lawyers in Georgia

Metreveli & Partners Law Firm advises and represents both creditors and debtors in insolvency, rehabilitation and bankruptcy proceedings in Georgia.

Our services include preparation of insolvency applications, protection of creditor claims, debtor representation, restructuring strategy, secured creditor protection and court representation in insolvency-related disputes.

If your company is facing financial difficulties, or your debtor is unable to satisfy its obligations, timely legal advice can significantly improve your legal and commercial position.

Metreveli & Partners provides insolvency and bankruptcy legal services in Tbilisi and throughout Georgia.