BULGARIA Law and Practice Contributed by: Nikolay Cvetanov, Boris Lazarov, Asen Apostolov and Patrizia Foffo, Penkov, Markov & Partners
in the bank are unavailable or in danger of such an event. Given the particularities of the proce - dure and the deposit guarantees provided, the BDIF also plays a key role in the proceedings from the outset. Notwithstanding the circumstance that the court is the authority that guides the proceedings until their finalisation, in practice it has a rather ancil - lary role related to ensuring the legality of the procedure. To that effect, BNB and the BDIF have the leading role in all bank-related insol - vency, recovery and resolution procedures in Bulgaria. After initiation of the procedure by BNB, at least two insolvency administrators, notwithstanding whether they are temporary or permanent, are chosen by the BDIF, and once the proceedings are opened the court does not have the right to amend the insolvency administrators appointed by BDIF. The insolvency administrator must be included in a list of bank insolvency administrators main - tained by BNB and, in practice, must be an inde - pendent administrator who does not participate in any other insolvency procedure. The term of appointment and the remuneration of the admin - istrator are determined by the managing board of BDIF. During the insolvency procedure, the insolven - cy administrators are obliged to identify all the creditors, assets, liabilities, the related collater - als of all types – ie, to determine the insolvency mass and to report the information to BDIF. At the latest of two months after the initia - tion of the procedure, the administrators must draft an asset realisation programme – subject to approval from the BDIF and providing for a
starting date for the commencement of the asset liquidation procedures and a deadline by which all assets and property rights in the insolvency mass will be liquidated. The insolvency admin - istrators may not deviate from the programme once it has been approved by BDIF, unless with the prior written consent of the managing direc - tor of the BDIF. The liquidation of the assets of the bank (respec - tively – the distribution of the acquired amounts thereof) is executed mainly by special tender procedures (ie, by means of public sale, by public auction or by secret auction), conduct - ed by the administrators, but subject to prior approval from the BDIF. These procedures may be appealed before the insolvency court by a creditor of the bank or by a third party with independent rights over the properties or rights affected by the liquidation of the assets. In addition, it is possible to sell a bank in insol - vency as a going concern – but only to another bank or banks licensed to do banking business in the country. The buyer is liable only for the obligations it has assumed under the court- approved terms of the transaction. The remain - ing claims and unvested rights shall be extin - guished. During the bank insolvency proceedings, the insolvency court is engaged with settling dis - putes relating to the inclusion of a creditor in the list of accepted claims in the insolvency pro - ceedings to allow the latter to benefit from the liquidation of the bank assets; adjudicating on appeals from persons participating in tenders or adjudicating on appeals against liquidation actions. However, the court in the bank insol - vency proceedings generally acts as a supervi - sory body and is not the main participant leading the insolvency proceedings.
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