Navigating Between Reorganization and Liquidation in Bankruptcy Proceedings: A Legal Analysis of Decision-Making Options Under Albanian Insolvency Law

This paper provides a doctrinal analysis of the legal pathways leading to the liquidation of a debtor within the framework of Albanian bankruptcy proceedings. Under Law No. 110/2016 "On Bankruptcy," the initiation of bankruptcy proceedings does not automatically result in either reorganization or liquidation. Instead, a series of procedural decision points involving the Reporting Creditors' Meeting, the bankruptcy administrator, and the bankruptcy court determine the outcome. This paper systematically examines the specific scenarios that mandate or permit the commencement of liquidation proceedings. These include first, the failure of the Reporting Creditors' Meeting to decide in Favor of reorganization, second, the failure of any statutorily authorized entity to submit a timely reorganization plan, third, the court's final rejection of an approved reorganization plan, fourth, the non-implementation or material breach of an approved plan, and fifth, the cessation of the debtor's activity. The paper ends by concluding to the effect that liquidation should not be seen as a default or punitive result, but a legally mandated result, when there is no longer objective assumption for a viable, consensual reorganization, a flowchart illustrating a possible decision structure with final results is provided, and a summary table is also included.