Our latest article, authored by our colleague Lidija Marković and published by Forbes Serbia, examines the legal consequences of a bank’s bankruptcy for the bank guarantees it has issued, focusing on their continued validity, recoverability and the circumstances in which their replacement may be required.
Following the recent opening of bankruptcy proceedings against ALTA banka a.d. Beograd, the legal status of bank guarantees issued by the bank has become particularly significant for companies. In this context, it is essential to distinguish between a bank guarantee’s legal validity and the practical prospect of recovering payment under it, as a guarantee may remain legally valid even after bankruptcy proceedings have been opened against the issuing bank. This distinction raises questions about the allocation of risk between the contracting parties and any obligation to replace the guarantee. The answers depend primarily on the terms of the underlying contract, particularly whether it requires replacement if the issuing bank enters bankruptcy proceedings.
Read more in the article.
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