The Criminal Framework for Insolvency Fraud in Georgia
In an insolvency process the accuracy and completeness of information are a distinct object of criminal-law protection. Two provisions form the legal basis of this page. Article 207 of the Criminal Code governs the breach of the duty to submit information owed by a person holding the authority to manage or represent the debtor to the bankruptcy or rehabilitation trustee / rehabilitation supervisor. Article 206 establishes liability for breach of the rules of keeping the accounting books during insolvency. Both norms serve a single institution — the honest conduct of the insolvency process: the trustee and the court build their decisions only on the information that the debtor's circle has submitted. Where that information is withheld, delayed or falsified, the Criminal Code answers, and this page sets out exactly how. If you managed or represented a company that is now in bankruptcy or rehabilitation, and the charge rests on the information submitted or on the books, the compositions and sanctions below are the legal map of your case.
The Duty to Submit Information — Article 207
Article 207 provides that a person holding the authority to manage or represent the debtor is obliged to submit, in the procedure established for that purpose, information to the bankruptcy or rehabilitation trustee / rehabilitation supervisor concerning the debtor's property, obligations, financial condition and activity, as well as ongoing disputes in court. Three forms of the crime are articulated: non-submission of the information in the established procedure, submission with deliberate delay, and submission in a falsified form. The sanction is uniform: a fine, corrective labour for a term of up to one year, or imprisonment for the same term. The practical weight of the norm lies in what it does not require: no material damage must be proven — a breach of the duty in any of the three forms is enough, which makes the scope of the authority and the timing of the submissions the central questions of every case under this article. What matters in practice is not the existence of the norms but the detail: which request was made, on which date, in which form, and what the answer was — which is why the archive of correspondence and the record of document transfers must be preserved from the earliest stage.
The Accounting Books in Insolvency — Article 206
The second norm — Article 206 — addresses the breach of the rules of keeping the accounting books during insolvency: it is punished by a fine or imprisonment for a term of up to 2 years, where the breach complicated the assessment of the real property situation. The books and the information complete each other: the books show the state of the records, while the submitted information shows the actual picture of the property and the disputes. A defence position must therefore be built on the interaction of both norms: which duty was breached, what caused it, and whether the conduct actually had the obstructive effect that the article requires.
Directions for the Defence
The typical defence directions are: contesting the subject composition — whether the particular person actually held the authority to manage or represent the debtor, and at which moment in time; contesting the deliberateness of a delay — a temporary defect and a deliberate delay are different things, and evidence establishing that difference deprives the charge of an element; contesting falsification — incomplete or mistaken information is not the same as falsified information; and, in the Article 206 context, negating the real obstructive effect on the assessment of the property situation. Each of these axes requires a documentary trail and a timeline set against the prosecution's chronology, which is why early assembly of the correspondence with the trustee usually decides the case. Independent verification deserves separate attention as well: where the information has been examined by a third party — an investigating authority, an expert or an auditor — their findings on completeness and accuracy frequently determine the outcome, and obtaining such conclusions at the pre-trial stage gives the defence an additional footing.
Frequently Asked Questions
Who must submit information in an insolvency process?
The person holding the authority to manage or represent the debtor must submit to the bankruptcy or rehabilitation trustee / rehabilitation supervisor information on the debtor's property, obligations, financial condition, activity and ongoing court disputes.
What is the punishment for failing to submit information?
Under Article 207 — a fine, corrective labour for up to one year, or imprisonment for the same term; the same sanction applies to deliberate delay and to submission in a falsified form.
What consequence does Article 206 require?
The sanction — a fine or imprisonment for up to 2 years — applies where the breach of the bookkeeping rules complicated the assessment of the real property situation.
Does Article 207 require damage?
No. A breach of the submission duty in any of its forms — non-submission, deliberate delay or falsified submission — is sufficient.
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