Nana Amisulashvili Discusses the Significance of Insolvency Law for Georgia's Economy

In a recent episode of the "Business Partner" podcast, "Guide to Economic Reforms," Nana Amisulashvili delved into the workings of Georgia's insolvency law and its crucial impact on both the economy and societal norms.

As the chairman of the Association of Business Rehabilitation and Insolvency Practitioners, Amisulashvili emphasized the law's role in establishing structured protocols and behavioral guidelines in both business and personal spheres. "While this legislation is relatively new, it aims to foster a culture of recovery from insolvency, a concept well-established in Europe and America," he explained.

A key feature of the law, according to Amisulashvili, is its presumption of reform. "We set specific objectives and identified critical issues. One significant breakthrough was empowering lenders to initiate the insolvency process. This ensures that both creditors and debtors have equitable access to the system," he said.

Amisulashvili pointed out that businesses in distress might neglect legal obligations and accrue further debt, making the presumption clause vital. He gave an example from the construction sector: "Consider a construction firm failing to meet its commitments and halting a project. What options do creditors have in such scenarios? Legal recourse often results in delayed reimbursements, devalued due to time, and creditors may find themselves trapped in additional financial obligations. In these situations, it's crucial for creditors to have the legal means to complete the project, provided through the rehabilitation regime."

Amisulashvili's insights come against the backdrop of significant growth in business rehabilitation in Georgia, a development supported by the USAID Economic Management Program. The new insolvency law has already benefited around 40 companies, marking a substantial step forward in the nation's economic reform.