The prestigious Bulgarian journal “Commercial Law” (issue 3/2024) features an article by Emanuil Damyanov Kolev, Attorney-at-Law, titled “The Liability of the Transferor and Transferee of a Commercial Undertaking”. In this article, Attorney Kolev analyzes the ongoing debate surrounding the current wording of Article 15, Paragraph 3 of the Commercial Law. One interpretation proposes that this provision should be read correctively, limiting the transferee’s liability. A competing interpretation argues for a strict reading of the text, under which the transferor’s liability is limited. More recently, a third interpretation has emerged in legal doctrine and case law, claiming that Article 15, Paragraph 3 primarily governs the internal relations (right of recourse) between joint debtors, and is inapplicable to their liability to third parties.
The article examines the legislative intent and history behind the current version of Article 15, Paragraph 3 of the Commercial Law. A deep analysis of the history of the adoption of those texts by the Bulgarian parliament indicates that the limitation was intended to apply to the transferee’s liability. This conclusion is important, as it gives a definitive answer to the ongoing debate of the text interpretation. Furthermore, Attorney Emanuil Kolev’s analysis extends to a number of further issues, including liability in partial undertaking transfers, the priority of claims, as well as the claims between the transferor and the transferee arising from their joint and several liability to creditors.
The issues above are of significant practical importance, as the conflicting interpretations create legal uncertainty for creditors regarding the scope of joint debtors’ liability. This uncertainty impacts both the transferor and transferee, affecting their relationships with third parties as well as their right of recourse for debts arising out of the joint liability.
We believe this article makes a valuable contribution to resolving these interpretative challenges, particularly in light of the divergent views that have developed in legal doctrine and case law. The article is available in Bulgarian and can be found here.
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