Fostering Business Resilience: An Urgent Call for Legal Awareness and Systemic Changes in Georgia

Supported by USAID's economic governance program, the inaugural international conference brought together numerous participants and sparked crucial discussions on business resilience.

Nana Amisulashvili, Chairperson of the Association of Business Rehabilitation and Insolvency Practitioners, shared key observations on the program "Business Partner in the Peak Hour". The conference underscored the critical challenges of enforcing legal provisions and enhancing corporate awareness in Georgia.

Amisulashvili revealed that the conference attendees had the opportunity to familiarize themselves with the legal systems of regional countries, including Armenia, Azerbaijan, and Turkey. This exposure clarified that Georgia is in a favorable position, with its latest legislation closely aligning with European norms.

However, Amisulashvili noted that there's a significant lack of knowledge regarding this legislation among small and medium-sized enterprises. "There's a pressing need to cultivate a culture of business resilience in the country," she stated.

"Companies only become cognizant of this law when they face insolvency and encounter subsequent issues. For those who have not navigated this procedure, their awareness remains minimal," she explained.

In her view, enforcing this law necessitates a transformation in the systemic approach, including changes to the internal procedural and technical order of public agencies. This specifically pertains to the seizure and the lifting of various guarantees on the properties of businesses in insolvency mode.

She further explained that to date, only 120 applications, including 16 for rehabilitation, have been filed with the court. Of these, 8 have been approved, indicating that the businesses and their creditors have agreed on new terms and commenced their implementation.

For reference, Georgia's new Insolvency Law "On Rehabilitation and Collective Satisfaction of Creditors" came into effect on April 1, 2021. According to this law, businesses struggling to meet their financial obligations can use new legal instruments to effectively negotiate with creditors. These measures enable them to either rehabilitate and re-enter the market as viable entities or declare bankruptcy and exit the market.