Company Administration in Case of Insolvency
Company Administration in Case of InsolvencyUpdated on Thursday 25th October 2018
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Insolvency procedures in Norway are regulated under two main legal acts – the Debt Reorganization and Bankruptcy Act 1984 and the Creditors Recovery Act 1984, which are applicable to legal entities registered in this country, as well as to natural persons. Our team of Norwegian lawyers can provide legal advice on the main procedures deriving from these legal acts.
Who can handle the administration of a Norwegian insolvent company?
The above mentioned acts are applicable to all types of insolvency cases in Norway, such as voluntarily and compulsory proceedings and bankruptcy procedures. The legislation also states the manner in which the company’s assets will be distributed amongst creditors, as well as the priority in which such claims will be handled. During the insolvency procedure in Norway, the following entities will be in charge with the administration of the company:
- • liquidator – the person will be appointed by the relevant Norwegian court with the purpose of handling and distributing the company’s estate and other types of assets;
- • creditor committee – the creditor committee is generally appointed by the court in the situation of complex insolvency cases;
- • auditor – it is also necessary to appoint an auditor (chosen by the court), provided that the company has complex assets;
- • creditors’ meetings – meetings at which all the company’s creditors are entitled to attend and the decisions taken during these meetings will have to be enforced by the appointed liquidator;
- • the Norwegian court – the court can overrule the decision prescribed by the appointed liquidator in specific conditions.
What types of duties are applicable to the company’s directors?
During the insolvency of a Norwegian company, the directors will have to handle specific tasks. For example, they will be in charge with management decisions and appointing shareholders’ meetings in the situation in which the company’s equity capital is lower than half of the company’s share capital. Our team of lawyers in Norway can provide more information concerning these matters.
The directors of the company are those who can decide if the company has to enter bankruptcy procedures, provided that other financial solutions could not cover the claims of the creditors. Businessmen are invited to contact our law firm in Norway for legal representation in front of a local court.