Insolvency Law at Suriname
In Suriname, insolvency and bankruptcy are primarily governed by the Bankruptcy Decree (Faillissementswet BES), which outlines the legal framework for both voluntary and involuntary liquidation of companies. This decree ensures an equitable distribution of a debtor's assets among creditors and establishes procedures for the administration and liquidation of bankrupt estates. (Bankruptcy -Guide to doing business, Bankruptcy -Guide to doing business)
⚖️ Legal Framework
1. Bankruptcy Decree (Faillissementswet BES)
The Bankruptcy Decree stipulates that a debtor who has ceased to pay its creditors is declared bankrupt by court order. The Court of First Instance appoints a bankruptcy trustee (curator) responsible for administering and liquidating the debtor's assets. A supervisory judge (rechter-commissaris) is also appointed to oversee the trustee's actions. The bankruptcy is a general attachment of nearly all the debtor's assets, irrespective of their location. This decree prohibits a creditor from improving its position relative to other creditors by recourse against assets outside Suriname, ensuring the principle of equality among creditors (paritas creditorium) . (Bankruptcy -Guide to doing business, Bankruptcy -Guide to doing business)
🧾 Insolvency Procedures
1. Voluntary Liquidation
Shareholders of a company may initiate voluntary liquidation by passing a resolution to dissolve the company. A liquidator is appointed to manage the winding-up process, which includes selling assets, settling debts, and distributing any remaining assets to shareholders.
2. Involuntary (Forced) Liquidation
Creditors or third parties can initiate involuntary liquidation by filing a petition with the court, demonstrating that the debtor has ceased to pay its debts. If the court finds the petition valid, it declares the debtor bankrupt and appoints a bankruptcy trustee to oversee the liquidation process. (Bankruptcy -Guide to doing business)
📋 Creditor Hierarchy in Liquidation
During liquidation, creditors are paid in a specific order:
Secured Creditors: Those with collateral backing their claims are paid first.
Preferential Creditors: This group includes employees owed wages and tax authorities.
Unsecured Creditors: Suppliers and other creditors without secured interests are paid after secured and preferential creditors.
Shareholders: Only after all creditors have been satisfied, shareholders receive any remaining assets.
🧑⚖️ Role of the Bankruptcy Trustee
The bankruptcy trustee is responsible for: (Bankruptcy -Guide to doing business)
Asset Management: Identifying, valuing, and selling the company's assets.
Debt Settlement: Distributing the proceeds from asset sales to creditors in accordance with the legal priority.
Reporting: Providing regular updates to the court and stakeholders on the progress of the liquidation. (Machine Translation of "Penal Code" (Suriname))
Compliance: Ensuring that all actions taken during the liquidation comply with the applicable laws and regulations.
📌 Practical Considerations
Professional Assistance: Engaging legal and financial professionals is advisable to navigate the complexities of insolvency proceedings.
Timely Action: Early intervention can provide more options for rehabilitation and may improve outcomes.
Transparency: Honest and complete disclosure of financial information is crucial for the fair resolution of insolvency cases.
For individuals or entities considering insolvency proceedings in Suriname, consulting with a legal professional specializing in insolvency law is essential to ensure compliance with all legal requirements and to determine the most appropriate course of action.
RELATED Blog
0 comments