Zim to fine-tune insolvency law

Martin Kadzere Senior Business Reporter
ZIMBABWE has started working on insolvency law reforms to overcome challenges related to the rapidly changing economic environment in the country.

Among the key reforms identified by stakeholders are the legal, regulatory and operational regime for insolvency, bankruptcy and judicial management of local companies, according to Law Development Commission deputy chairman Mr Joel

Zowa.

The Law Development Commission is a statutory body responsible for, among other things, promoting development of laws, reviewing the law

and its administration and making proposals for elimination from the law of any defects of a policy.

It also makes proposals for bringing the law into accord with current national and international trends.

Some of key priorities identified by various stakeholders include legislative reforms, which would encompass the development of a unified insolvency law that consolidates the elements of insolvency relating to corporates and in- dividuals.

Under the legislative reforms, the focus would also be on developing a coherent insolvency

and business rescue regime consistent with international best practices.

In addition, the reforms will focus on developing a regime for out of court workouts, an approach that will keep potentially viable, but distressed businesses alive instead of liquidation.

This would enable creditors to recover part or all of what they would be owed, preserve jobs and sustain customers and the supplier network.

In recent years, many creditors failed to recover substantial amounts when the companies owing them were either placed under judicial management or curatorship in the case of banks.