Discharge

• Author: United Nations Commission on International Trade Law
• Pages: 30-32

30 UNCITRAL Legislative Guide on Insolvency Law for Micro- and Small Enterprises

or an independent professional, where appointed, decide that the proceeding be

discontinued and converted to a liquidation, if the competent authority determines

that the debtor is insolvent and there is no prospect for viable reorganization.

Where the competent authority considers conversion to liquidation before submis-

sion of a reorganization plan, the competent authority should be mindful of the

time needed to prepare and submit a reorganization plan (see recommendations

339 and 340 above) and may consult the independent professional in making the

decision, if one has been appointed.

L. Discharge

Discharge in simplied liquidation proceedings

Decision on discharge

354. e insolvency law providing for a simplied insolvency regime should

specify that, in a simplied liquidation proceeding, discharge should be granted

expeditiously.

Discharge conditional upon expiration of a monitoring period

355. Where the insolvency law provides that discharge may not apply until aer

the expiration of a specied period of time following commencement of insolvency

proceedings during which period the debtor is expected to cooperate with the

competent authority (“monitoring period”), the insolvency law providing for a

simplied insolvency regime should:

(a) Fix the maximum duration of the monitoring period, which should be short;

(b) Allow the competent authority to establish a shorter duration of the moni-

toring period on a case-by-case basis;

(c) Specify that, aer expiration of the monitoring period, the debtor should

be discharged upon decision of the competent authority where the debtor has not

acted fraudulently and has cooperated with the competent authority in performing

its obligations under the insolvency law. (See recommendation 194.)

Discharge conditional upon the implementation of

a debt repayment plan

356. e insolvency law providing for a simplied insolvency regime may specify

that full discharge may be conditional upon the implementation of a debt