The new Bankruptcy Code of Armenia

The new Bankruptcy Code of Armenia introduces several important changes compared with the previous bankruptcy law. The main new points are:

1. A single Bankruptcy Code
   • Previously, bankruptcy rules were mainly in a separate law.
   • The new Code brings together rules on insolvency, restructuring, court procedures, asset sales, and creditor rights in one legal act.
2. Preventive restructuring (before bankruptcy)
   • Companies facing financial problems may have mechanisms to reorganize their debts before reaching full bankruptcy.
   • The goal is to save viable businesses instead of immediately liquidating them.
3. Financial rehabilitation
   • More attention is given to restoring a debtor’s ability to operate and repay creditors.
   • Creditors can participate more actively in decisions through creditor meetings and committees.
4. Stronger creditor protection
   • The Code emphasizes equal treatment of creditors, fair distribution of recovered assets, and greater transparency.
5. Electronic procedures
   • The reforms include plans for electronic bankruptcy systems and more automated procedures, reducing delays and administrative influence.
6. Court-confirmed obligations
   • Under the new approach, bankruptcy proceedings are linked more closely to obligations confirmed by a court decision and passed through compulsory enforcement procedures.
7. Asset sale through electronic auction
   • Property of the bankrupt debtor is intended to be sold through electronic auctions to increase transparency and reduce human interference.

In simple terms: the old system focused more on declaring bankruptcy and selling assets; the new system tries to prevent bankruptcy where possible, restructure debts, protect creditors better, and make the process more transparent.