The full Knesset late Monday passed a bill in its first reading meant to completely revamp the bankruptcy scene to help bring the law on the issue into "the 21st century" as Justice Minister Ayelet Shaked has often put it.
The new legislation, which has been shepherded for years by long-time Justice Ministry top bankruptcy official David Hahn, will reorient bankruptcy processes from being more friendly to creditor-banks to quickly collect on debts owed to them, to being more friendly to debtor-corporations so as to provide them the room to reorganize or orderly sell off their assets.
In addition, the new bill will enhance the power of smaller and unsecured creditors (creditors who are owed money but who, unlike banks, do not have liens on a debtor's assets) so that they also share with larger creditor-banks in getting back some of what they are owed.
Lastly, the new bill is designed to bring all laws relating to bankruptcy under one umbrella, to streamline bankruptcy processes and generally make the area more efficient.
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