Lithuania: Chamber of Insolvency Administrators established

From 1 January 2020 bankruptcy and restructuring administrators (insolvency administrators) will have their own self-governing body.

On 13 September 2019 the inaugural meeting of the Chamber of Insolvency Administrators (the Chamber) took place, during which the Association of Insolvency Administrators was established, the governing bodies of the Chamber (members and chair of the Presidium) and representatives of other institutions under the Chamber (members of the Court of Honour and the Audit Commission) were elected and the Statutes of the Chamber, the Code of Ethics for insolvency administrators and the Rules of the Court of Honour were approved. The Chamber was entered in the register of legal entities at the end of October. Establishing the Chamber means creation of a self-governing body for bankruptcy and restructuring administrators who will be called insolvency administrators after the Law on Insolvency of Legal Persons of the Republic of Lithuania (the Insolvency Law) enters into force on 1 January 2020.

Unlike other state-regulated professions (e.g. attorneys, notaries, bailiffs, judges, auditors), bankruptcy and restructuring administrators have so far not been united in a professional self-governing association, but only organized in various private organizations which, without self-governing rights, could not ensure proper representation of the profession. Mandatory membership in the Chamber aims at ensuring a higher level of competence of insolvency administrators and appropriate professional development as well as more efficient administration of insolvency procedures.

The Insolvency Law delegates to the Chamber some of the functions of a public supervisory authority which at the state level supervises the activities of insolvency administrators. From 2020 the Chamber will organize and conduct qualification exams for insolvency administrators, supervise training and certification, monitor adherence to ethical principles and ensure handling of complaints about the ethics of administrators, and represent administrators in drafting and amending new legislation. The Chamber will also perform a self-monitoring role, i.e. the Presidium of the Chamber will be able to impose penalties on insolvency administrators. The most severe will be removal of members of the Chamber which in the event of compulsory membership of the Chamber means a prohibition on working as an insolvency administrator.

Establishing self-government of insolvency administrators is expected not only to ensure proper representation and defence of the interests of all insolvency administrators but also to improve the quality of insolvency procedures and prevent administrators from abusing their rights and delaying insolvency proceedings.

Source: Law on Insolvency of Legal Persons of the Republic of Lithuania

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