APPOINTING INSOLVENCY OFFICE HOLDERS IN CROATIA

The aim of this paper, in the narrow sense, is to examine the practice of appointing Croatian insolvency office holders (IOHs; i.e. bankruptcy practitioners) after the new Insolvency Act came into force in Sep. 1st 2015; in the wider sense, it is to generally explore appointments of Croatian bankruptcy practitioners. Author’s contribution consists in linking and joining publicly available databases on practitioners’ appointments, protective measures (account preservation orders), and debtors’ names and personal identification numbers, and in application of scientific methods in statistical analysis of the derived sample. Parametric (ANOVA, Levene and Brown-Forsythe test) and non-parametric (Kruskal-Wallis and Median-test) analysis were used to test the hypothesis of homogeneous variances. Results indicate that the hypothesis of approximately equal debtors’ assets in cases where IOHs are appointed at random and cases where IOHs are appointed non-randomly can be rejected; when debtors have above average amounts of assets IOHs usually get appointed by privilege (i.e. by judge, non-randomly). Furthermore, 14% of all appointments are not performed randomly, and certain courts select IOHs by privilege as three times more often as it is usual in other courts. Practitioners are still unevenly appointed; one-tenth of them got half of the cases, while nine-tenths got the other half. A large part of the practitioners that got most of the cases before the new Insolvency Act still get most of the cases. In random appointments there is a wide inconsistency as only two of IOHs got 15% of all randomly assigned cases, while the other 99% of practitioners got the rest. All in all, we recommend a review of the appointment practice and professionalization of the occupation in the context of determination to fostering debtor restructurings.