Bulgaria

Security interest law in Bulgaria

1. Can an intercompany guarantee be granted?

1.1 Upstream?	Yes
1.2 Downstream?	Yes
1.3 Lateral?	Yes
2. Can a guarantee be given under foreign law (e.g. English law)?	Yes
3. Any special arrangements (e.g. to deal with transfer pricing/corporate benefit)?	Transfer pricing. Insolvency contentious. Financial assistance rules (applicable to joint stock companies only).

4. Can a security interest be granted in the following type of asset?

4.1 Real property	Yes
4.2 Shares (privately held)	Yes
4.3 Shares (marketable securities)	Yes
4.4 Receivables	Yes
4.5 Bank account	Yes
4.6 IP/Trademark	Yes
4.7 Equipment/Plant/Machinery	Yes
4.8 Inventory	Yes
4.9 Insurance	Yes
4.10 Rights under a contract	Yes, but step in agreements.
5. Can security interests be granted to a foreign lender?	Yes
6. Can multiple security interests be granted over the same asset?	Yes
7. Can a security interest be granted to secure liabilities of a holding company, a subsidiary or any other affiliate?	Yes

8. In order to be enforceable against third parties, must a security interest be?

8.1 Notarised?	Yes, in some cases.
8.2 Registered?	Yes, in most cases.
8.3 Other?	Notifications regarding creation of the security interest.
9. Does registration in most cases protect the secured creditor against the debtor’s subsequent dealings with the secured asset?	Security interest follows the security assets but the security provider (mostly the debtor) may dispose validly of them.
10. Is there any stamp or similar tax or duty payable on the security document?	No

11. For a security interest to be legally enforceable which items must be filed as part of the registration or notarisation process?

11.1 Entire security agreement?	Yes, in some cases.
11.2 Names of pledgor and pledgee?	Yes, in most cases.
11.3 Description of secured asset in general terms?	Yes
11.4 Description of each individual secured asset?	Yes, in some cases.
11.5 Documents concerning ownership of secured asset?	Yes, in some cases.
11.6 Documents concerning debt in respect of which the asset is being secured?	No

12. Can a right to enforce security arise:

12.1 When the secured debt is unpaid and due?	Yes
12.2 When there is some other breach of the pledge/security agreement?	Yes, upon full or partial acceleration of the loan.
12.3 When the debtor becomes insolvent?	Yes
13. Can the creditor enforce its security interest by taking possession of the asset and selling it without court assistance?	Yes, in some cases.
14. Is an instrument for direct enforcement necessary/available/market practice?	Yes, in some cases.
15. Are powers of attorney to the secured party used to facilitate a sale of secured assets in an enforcement situation?	Yes, in some cases.
16. If a sale is permitted without court assistance does it have to be made by public auction?	Yes, in some cases.
17. Can a transfer of all or part of the debt be made without affecting the security over the assets?	Yes, subject to registration and notarisation requirements.
18. Is there anything else of which a lender should be aware as unusual or particularly difficult?	Hardening periods in insolvency proceedings. No security trustee concept. Security established by a third party may be challenged due to lack of consideration.