1. The organisers of the Conference thank the following for their support Conference Sponsor Academic Forum SponsorConference Supporter www.buse.de www.cndcec.itwww.edwincoe.com Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili

2. Trends in the Development of Insolvency Laws in Transition States: The Baltic Experience Professor Paul Varul, University of Tartu

3. Baltic States: Estonia, Latvia, Lithuania Re-establishment of independence: the beginning of the 90’s Creation of new legal system Insolvency legislation as an entirely new field

4. General tendency First: protection of creditors After that: Reorganization of legal persons Adjustment of debts of physical persons

5. Insolvency legislation: Estonia Bankruptcy Act: 1992 Amendments: 1996, 2003, 2009 Reorganisation Act: 2008 Debt Restructuring and Debt Protection Act: 2010

6. Insolvency legislation: Latvia The Law on Insolvency and Bankruptcy of Undertakings and Companies: 1992 Amended: 1996 Insolvency Law Act: 2007 New Insolvency Law Act: 2010

7. Insolvency legislation: Lithuania Enterprise Bankruptcy Law: 1992 Amendments: 1996, 2001, 2008 Enterprise Restructuring Law: 2001 New version: 2010

8. Reorganisation In Estonia: separate law, since 2008 In Latvia: general law – Insolvency Law Act, since 2007 In Lithuania: separate law – 2001 and 2010

9. Insolvency of physical persons Estonia: 1.Bankruptcy proceedings (1992) and proceedings for releasing from debts (2004) 2.Since April 6, 2011 – proceedings for the adjustment of debts Latvia: bankruptcy proceedings and proceedings for releasing from debts (since 2007) Lithuania: bankruptcy and releasing from debts of physical persons is not possible

10. The principle of equal treatment of creditors General principle in all three states Exception: prerogative of pledge holders Other priority claims: Latvia and Lithuania Set-off: In Estonia – yes; in Latvia on a limited scale and Lithuania – no

11. Bankruptcy trustee Training Requirements for trustees in bankruptcy Differences in Baltic states

12. Time, cost and recovery rate World Bank statistics (based on a model case) Time required to recover debts Estonia – 3 years; Latvia – 3 years; Lithuania – 1.5 years Regional average in the EU – approx. 1.9 years Cost required to recover debt Latvia 13% of estate; Estonia 9%; Lithuania 7% Regional average in the EU – 10.6% Recovery rate for creditors Lithuania 49.6%; Estonia 35.5%; Latvia 31.9% Regional average in the EU – 59.3%

13. Additional problems Many proceedings end with abatement Debtors file applications too late Liability of members of the Board does not function well Reorganisation is not very successful Adjustment of debts of the physical persons does not function yet

14. Conclusions Within 20 years (1991-2011) all Baltic states have created a functioning insolvency legislation Bankruptcy proceedings have evolved the most; reorganisation and adjustment of the debts of physical persons the least Further progress should be associated with the harmonization of insolvency legislation within the European Union

15. The organisers of the Conference thank the following for their support Conference Sponsor Academic Forum SponsorConference Supporter www.buse.de www.cndcec.itwww.edwincoe.com Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili

16. The organisers of the Conference thank the following for their support Conference Sponsor Academic Forum SponsorConference Supporter www.buse.de www.cndcec.itwww.edwincoe.com Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili

17. The organisers of the Conference thank the following for their support Conference Sponsor Academic Forum SponsorConference Supporter www.buse.de www.cndcec.itwww.edwincoe.com Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili

18. The organisers of the Conference thank the following for their support Conference Sponsor Academic Forum SponsorConference Supporter www.buse.de www.cndcec.itwww.edwincoe.com Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili

19. The organisers of the Conference thank the following for their support Conference Sponsor Academic Forum SponsorConference Supporter www.buse.de www.cndcec.itwww.edwincoe.com Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili

20. The organisers of the Conference thank the following for their support Conference Sponsor Academic Forum SponsorConference Supporter www.buse.de www.cndcec.itwww.edwincoe.com Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili