On Jun. 30, 2023, Reg-Track made an editorial update to the above summary include the Jun. 12, 2023, update on small enterprises, formerly included elsewhere in error.
On Jun. 18, NOR GVT proposed to extend rules in reconstruction law.
NOR GVT launched consultation on extension of the application of Reconstruction law.
Follows NOR GVT Oct. 2020 proposed new rules on debt negotiations, see #88607.
Overview
When the pandemic started NOR GVT proposed to change rules for debt negotiations.
To assist viable companies affected by acute revenue shortfalls, to continue operating.
Now propose continued application of temporary law on reconstruction to Jan. 1, 2023.
This will be at same time the State's work continues on proposals for permanent rules.
Even if NOR started reopening post pandemic, many companies still having hard time.
So will continue with rules on reconstruction to help bankruptcy threatened companies.
Reconstruction Act is not directly related to Covid situation but to long-term economic effects of the pandemic, said Minister of Justice and Emergency Management.
Per Bronnoysund Register Center data, 23 reconstruction negotiations were opened in the period from the law's entry into force on May 11, 2020 to beginning of Jun. 2021.
Draft under consultation aims to ensure the tools introduced by the temporary law are available until permanent legal rules on reconstruction are in place.
Reconstruction Act Tools
Entails changes in several respects compared with previous rules on debt negotiation in the Bankruptcy Act e.g. reorganization negotiations can be initiated at earlier stage.
Reorganization plan can be adopted more easily, possible to convert debt into equity.
Allows for temporary exemption from public preferential right for claims for tax, VAT.
Possibility for collateral for loans for financing in reconstruction with priority over all other mortgagees; debtor's protection against opening of bankruptcy is strengthened.
As is the implementation of compulsory coverage during reorganization negotiations.
The note also proposes regulations on simplified reorganization negotiations for small enterprises, regulations on temporary exemptions from priority rules in reconstruction, which make temporary exemptions from the public preferential right for tax claims and VAT claims, etc. be continued until Jan. 1, 2023.
Effectiveness
Consultation open until Aug. 12, 2021.
Sep. 24, 2021 Extension Bill
On Sep. 24, 2021, NOR GVT presented bill for Reconstruction Act to continue to Jul. 1, 2023, noting further work is being carried out on proposals for permanent rules.
The intention is to help viable companies that are affected by acute income shortages.
Also issued regulations extending until Jul. 1, 2023, the regulations on temporary exemptions from the priority rules during reconstruction pursuant to the temporary act on reconstruction to remedy financial problems as a result of an outbreak of covid-19.
At outset of pandemic, NOR GVT proposed introducing rules on reconstruction to help viable businesses affected by acute revenue shortfalls; aim of continuing temporary law on reconstruction with regulations is to ensure tools that were introduced with the temporary law are available until permanent legal rules on reconstruction are in place.
Dec. 22, 2021 Small Enterprises
On Dec. 22, 2021, NOR GVT issued amended regulations on simplified reorganization negotiations for small enterprises, changing the repeal date to Jul. 1, 2023.
In Jan. 2023, NOR GVT proposed rules to avoid unneeded bankruptcies see #160564.
Jun. 12, 2023 Small Enterprises
On Jun. 12, 2023, NOR GVT issued amending regulations on simplified reorganization negotiations for small enterprises, changing the repeal date to Jan. 1, 2025.
Regulation 832 comes into force immediately upon issuance i.e. on Jun. 9, 2023.
Jun. 19, 2023 Extended Repeal Date
On Jun. 19, 2023, NOR GVT issuedRegulations amending the Regulations relating to temporary exemptions from the priority rules during reconstruction under the Interim Reconstruction Act to remedy financial problems arising from outbreak of Covid-19.
The repeal date has been changed to Jul. 1, 2025.
Jun. 30, 2023 Editorial Update
On Jun. 30, 2023, Reg-Track made an editorial update to the above summary include the Jun. 12, 2023, update on small enterprises, formerly included elsewhere in error.
Regulators
NOR GVT
Entity Types
Bank; CNSM; Corp; MG Orig
Reference
OG 2023-0687, 6/19/2023; OG 2023-0607, 6/12/2023; Reg 832, 6/9/2023; OG 2021-2238, 2021-2343, 2021-2357, 12/22/2021; PR 9/24/2021; CP, PR, 6/18/2021; Reconstruction Law; Bankruptcy Act; COVID-19
