There is insufficient publicly available information that directly addresses Tunisia's compliance with the World Bank's Principles and Guidelines for Effective Insolvency and Creditor Rights Systems. However, a 2004 study by P. A. Casero and A. Varoudakis attempted to quantify Tunisia's insolvency regime according to a number of measures. The authors concluded that, in Tunisia, creditor's rights in bankruptcy are weak, business exit remains lengthy, and the courts reserve broad powers in insolvency proceedings. According to the authors, this situation does not help to preserve the value of the creditors' claims. The World Bank's 2008 ranking of Tunisia's "closing a business" performance on three salient indicators (time required, cost, and return to creditors) suggests that the situation remains largely similar today: in Tunisia, it takes an average of 1.3 years to complete proceedings, costs an average of 7% of the total estate, and the average return to creditors is 51.5 cents on the dollar.

General Overview

Writing for the World Bank in 2004, P. A. Casero and A. Varoudakis found that Tunisia's insolvency and creditor rights system displayed deficiencies. Specifically, they found that in Tunisia, creditor's rights in bankruptcy are weak, business exit is still lengthy, and broad court powers in bankruptcy proceedings do not help achieve the insolvency goals of preserving the value of creditors' claims. According to these authors, the Tunisian approach to insolvency has been similar to that followed in other countries that share a French legal heritage. Such systems tend to rely heavily on the broad powers of the court. Thus, Tunisian insolvency law centers upon court initiatives, in which the court originates the bankruptcy plan and has sole access to the bankruptcy report. The creditors and the management of the insolvent firm have no effective participation in the process. Casero and Varoudakis find this approach questionable. According to them, "evidence shows that expanding court powers in bankruptcy proceedings do not have the desired effects" (p. 20). They also take issue with the practice of restricting access to the bankruptcy report and limiting participation in the process to the courts. They hold that such information is necessary for stakeholders in the proceedings, in part because it would help to preserve of the absolute priority and value of creditors' claims. The report concludes that "because credit-sharing information is inefficient and creditor's rights in bankruptcy are weak; business exit is still lengthy and broad court powers in bankruptcy proceedings do not help achieve the insolvency goals of preserving the value of creditors' claims" (p. 21). For this reason, the authors call for reforms, adding that this would encourage greater private investment. Methodologically, the authors based some of their analysis on the data of the World Bank's "Doing Business 2003" publications: time required to close a business and cost of closing as a percentage of the estate. On these indicators, in 2004 Tunisia was shown to require 2.5 years to complete the process, and to cost an average of 8% of the estate. In addition, they looked at two additional indicators. The first of these is the Goal-of-Insolvency Index, which is a composite score calculated by averaging the cost-of-insolvency (rated on a scale of 1-100), time required for the procedure (again, scaled from 1-100), the observance of absolute priority of creditor claims, and efficient outcome achieved. For all of these numbers, the higher the score, the better the performance in the index characteristic. The final score, again expressed on a 1-100 scale, indicates the overall efficiency of the process, with 100 indicating "perfect efficiency" (p. 30). Although the authors do not mention a specific score on this indicator for Tunisia, their argument implies that the score would fall very close to 1. Finally, the authors consider a Court-Powers Index, which averages scores assigned to three factors: the role of the court in appointing and replacing insolvency practitioners (e.g. administrators) unfettered by legal restraints, accessibility of the bankruptcy report to stakeholders other than the court; and the role of the court in determining the adoption of a rehabilitation plan. On a scale of 1-100, where 100 indicates greatest court involvement, Tunisia is rated at 67.

The World Bank "Doing Business 2008" snapshot of closing a business shows that there has been some improvement compared to the 2003 results. As of the 2008 snapshot, closing a business takes an average of 1.3 years, which is significantly less than the regional average of 3.7 years and matches the 1.3 year average achieved by member states of the Organization for Economic Cooperation and Development (OECD). The World Bank report finds that Tunisia's cost of proceedings averages 7% of the estate. This compares to a regional average of 13.9, and is slightly less costly than the OECD average of 7.5%. The World Bank also measures returns to creditors, expressed in terms of cents on the dollar. For Tunisia, this average is 51.5 cents, which is approximately twice the regional average of 25.8 cents, but significantly lower than the OECD average of 74.1 cents.