Requirements for Corporate Rehabilitation or Insolvency Proceedings in Georgia

To determine whether a company is insolvent, it must be assessed whether it can actually meet its due liabilities with the funds available to it. Individual late payments alone are not sufficient if the overall picture does not show a persistent liquidity shortfall. If the company is still meeting its current obligations, impending insolvency may exist if a reliable financial plan indicates that liquidity will be insufficient in the future. Whether this risk provides access to a particular proceeding depends on that proceeding’s specific requirements. For rehabilitation, in addition to the crisis, the economic prospects for continuing and restructuring the business must be examined. For insolvency proceedings aimed at winding up the company, it must be determined whether the requirements for that type of proceeding are met. The assessment requires current information on cash and other available funds, due and future debts, incoming receivables, assets, and collateral. Creditor lists, accounting records, bank statements, contracts, and liquidity plans must be consistent with one another. The debtor’s identity, legal form, and registration status must also be substantiated. The court assesses access to the proceedings based on the grounds asserted and the corporate and financial documents submitted.