The changes will expand the scope of debt-to-equity conversion and provide creditors with the possibility to appoint their management representatives in court-mandated financial restructuring operations.

The board of creditors would also get added powers in reviewing company documentation and in appointing and dismissing company administrators.

Employees will be able to lodge a complaint against the management of insolvency proceedings in the event their salaries are more than 15 days late.

Moreover, the management and supervisors will be jointly liable for unpaid wages for three months prior to the commencement of insolvency.

The criteria for the technical start of insolvency will be tightened, stipulating that a company is insolvent if its bank accounts have been blocked for 60 days back-to-back or over 60 days within a 90-day period.

Many bankruptcy proceedings drag on for years due to the inability to sell off assets at auction, which has prompted the government to propose the option of a Dutch auction-style asset sale.

A simplified insolvency procedure will be put in place for sole traders in a bid to speed up proceedings and prevent company owners from siphoning off assets.

The ministry will meanwhile get the power to sanction administrators, a move that comes in response to a spate of recent scandals involving administrators who abused their office.

The amendments, which will be fast-tracked through parliament, will be followed by a new bill on "systemic deleveraging", which will allow debt-to-equity conversions even before a company is technically insolvent.

"One of Slovenia's main problems is corporate debt, which is the cause of serious concern. Since the state's ability to directly help businesses is limited, we will try helping with legislation," Pličanič said.

The legislation was drafted in response to mounting criticism that Slovenia's insolvency proceedings were too rigid and failed to accomplish the ostensible goal of preserving healthy parts of cash-strapped companies.

Calls for new insolvency legislation have been coming from institutions such as the central bank, the Chamber of Commerce and Industry (GZS) as well as the Organisation for Economic Cooperation and Development (OECD)