Grounds for initiating a bankruptcy proceeding in Croatia

Bankruptcy proceedings are conducted for the collective settlement of a debtor’s creditors, through the liquidation of the debtor’s assets and distribution to creditors. The main purpose of bankruptcy proceedings is therefore to ensure the settlement of creditors’ claims, after which the debtor – a legal entity – ceases to exist. Bankruptcy proceedings may be initiated if the court establishes that there are grounds for bankruptcy. The statutory grounds for bankruptcy are insolvency and ver-indebtedness. Insolvency A debtor is deemed insolvent if they are unable to continuously meet their due monetary obligations. The fact that the debtor has satisfied, or may be able to...