Lithuania: significant increase in insolvency proceedings!
In an attempt to clean the market of insolvent companies and to protect business partners and the interests of the State, the Lithuanian tax inspectorate (VMI) and the social security insurance institution (Sodra) have recently taken a much tougher approach on businesses defaulting on their payment obligations. This has resulted in an increase of 30% in insolvency proceedings in the first half of 2017, compared to the same period in the preceding year. VMI and Sodra together initiated some 73% of all proceedings in the first half of 2017.
In our view, the cleanup process sends a clear signal and is to be welcomed as protecting businesses that act in good faith. At the same time, a proper background check on a (future) business partner should be part of the routine before entering into any transaction.