Tamar Buadze: 'Law on Rehabilitation and Collective Satisfaction of Creditors' Paves the Way for European Integration"

Tamar Buadze, the head of the Economic Reforms component of the USAID Economic Governance Program, has stated that the initiation of insolvency reform in Georgia has led to a significant increase in insolvent companies seeking rehabilitation rather than filing for bankruptcy. She affirmed that the enactment of the "Law on Rehabilitation and Collective Satisfaction of Creditors," two years ago, symbolizes progressive economic development and serves as a catalyst for Georgia's integration into Europe.

Buadze explained, "The emphasis of the law, as is evident from its title, is predominantly on facilitating the company's rehabilitation. Post the implementation of the new law, we've witnessed a considerable rise in the number of petitions for rehabilitation. Most insolvent companies now opt for rehabilitation over bankruptcy. The law provides an environment that enhances the likelihood of creditors and investors recouping a larger portion of their money. This element is especially significant for both local and foreign investors when they assess the investment climate in the country."

Buadze highlighted that one of the primary objectives of the insolvency reform is to instill greater confidence in the business community towards the insolvency system, thereby encouraging timely utilization of this system.

She elaborated, "The initiatives spearheaded by USAID's Economic Governance Program will serve to enhance business awareness, which, in turn, will contribute to preserving more businesses and reintegrating them into the economic cycle."