Georgia's insolvency legislation has undergone significant revision, and the changes took effect in early 2025. For international companies holding claims against Georgian entities – or operating within Georgia's commercial environment – the window to act is narrowing. Creditors who do not adapt their approach to insolvency proceedings risk losing priority status, missing proof of debt deadlines, or finding their claims subordinated under the revised rules.
Georgia's amended insolvency legislation introduces revised procedures governing creditor participation, the appointment of an administrator or liquidator, and the conduct of a creditors meeting. The amendments apply to insolvency proceedings commenced on or after the effective date of January 1, 2025. International creditors must file a proof of debt within the deadlines prescribed under the new rules to preserve their standing in any distribution.
This alert explains what changed, which businesses are affected, and the concrete steps international companies should take without delay.
What changed – the key amendments and their effective date
Georgia's insolvency legislation was amended through revisions to the body of law governing commercial insolvency and restructuring. The amendments entered into force on January 1, 2025. All insolvency proceedings initiated on or after that date are subject to the new rules. Proceedings commenced before that date continue under the prior regime, though certain transitional provisions may apply.
The principal changes concern four areas.
Creditor registration and proof of debt. The amended legislation tightens the timeline for filing a proof of debt. Creditors must submit their claims to the appointed administrator within a shorter window following the opening of insolvency proceedings. The previous regime allowed a more flexible period. Under the new rules, a creditor who misses the deadline may be excluded from the creditors meeting or ranked behind timely claimants in the distribution waterfall.
Administrator and liquidator appointment. The process for appointing an administrator or liquidator now includes additional qualification requirements and a more structured court supervision mechanism. The Tbilisi City Court (the principal commercial court in Georgia) exercises closer oversight over the administrator's conduct. Creditors with secured claims retain the right to challenge an appointment they consider improper, but must do so within a defined period after the court order.
Restructuring plan approval. The threshold for approving a restructuring plan at a creditors meeting has been adjusted. A plan now requires support from a qualified majority of creditors measured by value of admitted claims, not by headcount alone. This change strengthens the position of large institutional creditors relative to smaller claimants. It also means that a creditor holding a significant share of total debt can block an unfavourable restructuring plan more effectively than before.
Cross-border insolvency recognition. The amendments introduce clearer rules for recognising foreign insolvency proceedings in Georgia. An automatic stay on Georgian assets can now be sought by a foreign-appointed representative. This is a material development for international groups with Georgian subsidiaries or counterparties. Practitioners advising on insolvency developments in the CIS region should note that Georgia's approach now aligns more closely with international best practice in this area.
Who is affected – threshold criteria and business categories
The amendments affect a broad range of actors in Georgian insolvency proceedings. The following categories of international businesses face the most immediate exposure.
- Foreign trade creditors owed amounts by Georgian companies that have entered or may enter insolvency proceedings.
- Banks and financial institutions with loan exposure to Georgian borrowers, particularly where security is held over Georgian assets.
- Parent companies and group entities with intercompany claims against Georgian subsidiaries.
- Foreign investors holding equity or debt instruments in Georgian businesses undergoing restructuring.
- Counterparties to long-term contracts – including supply, distribution, and service agreements – where a Georgian party is in financial difficulty.
The threshold for mandatory insolvency proceedings in Georgia is met when a debtor becomes unable to meet its payment obligations as they fall due, or when its liabilities materially exceed the value of its assets. There is no minimum claim-value threshold for a creditor to participate in proceedings once opened. However, the practical benefit of participation depends on the size and nature of the claim. Unsecured creditors with modest claims may find that the cost of active participation exceeds the likely recovery.
International companies that have not previously engaged with Georgian insolvency law should note a structural feature of the system. Georgia operates a civil law system with a distinct approach to priority and distribution. Secured creditors are generally satisfied first, followed by privileged unsecured creditors, then ordinary unsecured creditors. The amendments preserve this ranking but modify the procedural steps required to assert it. A creditor who fails to follow the correct procedure – even if the underlying claim is valid and well-documented – may forfeit priority.
For a comprehensive view of creditor remedies available beyond the insolvency context, including enforcement and pre-insolvency dispute tools, see our overview of corporate disputes in Georgia.
To receive an expert assessment of your creditor position in Georgian insolvency proceedings, contact us at info@ferrazwhitmore.com.
What to do now – immediate actions for international companies
Companies with existing or potential exposure to Georgian insolvency proceedings should treat the following as priority actions.
1. Audit your Georgian counterparty exposure immediately. Identify all outstanding receivables, intercompany loans, and contractual claims against Georgian entities. Determine whether any counterparty shows signs of financial distress – payment delays, requests for renegotiation, or public court filings. The earlier a creditor identifies a potential insolvency situation, the more options remain available.
2. Verify your proof of debt readiness. Under the amended rules, the deadline for filing a proof of debt runs from the date of the court order opening proceedings. not from the date you receive notice. International creditors frequently miss this distinction. Prepare your claim documentation in advance: contracts, invoices, account statements, and any security documentation. A lawyer in Georgia with insolvency experience can confirm the precise current deadline applicable to your proceedings.
3. Assess your security position. If you hold a Georgian law security interest – pledge, mortgage, or guarantee – verify that it was properly registered before the insolvency opened. Under Georgia's insolvency legislation, a security interest that was not perfected before the relevant look-back period may be challenged by the administrator as a preference. Engage a law firm in Georgia to audit the registration status of all security.
4. Engage with the creditors meeting process. The revised rules give greater weight to creditors who participate actively. Attendance at the creditors meeting – in person or through a duly authorised representative – is the primary mechanism for influencing the outcome of a restructuring plan. Passive creditors who do not vote risk having a plan approved on terms unfavourable to their class. Ensure your representative has a valid power of attorney under Georgian law before the meeting is convened.
5. Monitor cross-border recognition options. If a Georgian debtor also has assets or operations in other jurisdictions, explore whether a coordinated cross-border strategy is available. The amended rules on cross-border recognition create new tools for obtaining stays and asset preservation orders in Georgia when a foreign proceeding is the primary insolvency. Conversely, if the primary proceeding is in Georgia, consider whether parallel recognition in other jurisdictions is warranted to protect assets held abroad.
Detailed guidance on the full range of insolvency and restructuring tools available in Georgia is set out in our dedicated service overview for insolvency and restructuring in Georgia.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our team combines Portuguese civil law expertise with English common law tradition to deliver cross-border legal solutions in insolvency, restructuring, and creditor rights matters. Our CIS and high-growth markets practice, led by Senior Associate Anna Chen, supports international companies managing insolvency proceedings, creditor claims, and restructuring strategies in Georgia and across the wider region. The firm's insolvency and restructuring practice covers matters before local commercial courts and in cross-border proceedings involving multiple legal systems. We work with institutional creditors, multinational groups, and in-house legal teams who need results-oriented counsel under tight procedural deadlines. To discuss how the 2025 Georgian insolvency amendments affect your position, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.