The European Bank for Reconstruction and Development (EBRD) has launched an assessment that aims to provide detailed guidance on legislative gaps to address an expected increase in businesses needing to use formal restructuring procedures following the COVID-19 crisis.
"The survey will provide an up-to-date map of restructuring frameworks across the EBRD regions in Europe, Asia and Africa, aiming at providing an overview of the options within pre-insolvency and insolvency frameworks across the economies where the Bank engages," EBRD said in a statement.
Many businesses around the world have experienced an interruption in economic activity that may continue into 2021 because of the crisis and they need to restructure both operationally and financially, while others may even cease to be viable, according to the statement.
The assessment will be open for public consultation until 31 October 2020 and will be available in English, French and Russian, according to the statement.
For benchmarking purposes, EBRD said that the consultation is also open to countries where the EBRD does not invest. The results of the assessment as well as a report summarising its findings will be made publicly available online thereafter.
“The assessment will also be benchmarked against international best practices to provide a functional, comparative tool for development institutions, governments and civil society to gauge the quality and effectiveness of a country’s insolvency laws. It will review existing national legislation in all EBRD economies of operations and consider the views of interested parties and local insolvency system users to assess their efficacy”, reads the statement.
“Many of the governments in our regions have successfully enacted emergency legislation to ringfence the ramifications of the Covid-19 crisis, but longer term insolvency law reform is critical to ensure that these businesses are able to get back on their feet and thrive again,” EBRD Senior Counsel Catherine Bridge-Zoller Catherine Bridge-Zoller.