Something Fishy About New Bankruptcy Proposal - International Law Office

The Norwegian Ministry of Fisheries has prepared a draft proposal for new rules regarding concessions where a breeder of fish or shellfish goes bankrupt.

Section 3 of Act 68 (June 14 1985) regulating the breeding of fish and shellfish states that breeding requires a concession granted by the Ministry of Fisheries. Section 4 provides that the concession will be annulled following the bankruptcy of the concessionaire. Anyone wishing to continue the business must apply for a new concession.

According to a legislative proposal, bankruptcy will still annul the concession. However, the bankruptcy estate may obtain a temporary concession. Further, a new owner appointed by the bankruptcy estate will be entitled to a new concession, provided that such new owner fulfils the general conditions set forth in the act.

If this proposed regulation comes into force, the concession will become an asset which a bankruptcy estate may realize by assignment. Thus, the value that the concession represents will fall to the creditors. This implies, according the Ministry of Fisheries, that the former imbalance between the creditor and debtor will be eliminated.

The new regulation does not imply that the concession may be used as security.

The Ministry of Fisheries has stated in a press release that no company in the aquaculture industry has been declared bankrupt during the last six years. It is possible that the new regulation will contribute to an increased rate of bankruptcy in the Norwegian aquaculture industry.

For further information on this topic please contact Aksel Hillestad at Arntzen de Besche by telephone (+47 23 89 40 00) or by fax (+47 23 89 40 04) or by email (aksel.hillestad@arntzendebesche.no).