By COBALT Partner Annika Peetsalu, Associate Heivo Reinek (EE), Specialist Counsel Mārtiņš Aljēns (LV), Partner Dr Paulius Markovas and Senior Associate Dr Ieva Strunkienė (LT).
After several difficult years, insolvency trends across the Baltics are beginning to stabilise. The rapid growth in bankruptcies has slowed and, in some countries, has even reversed. However, the pressure on businesses has not disappeared. Based on its experience in economic disputes, corporate reorganisations and restructuring processes, Baltic law firm COBALT has prepared an overview of the restructuring and bankruptcy landscape.
In Estonia, the number of bankruptcies declined slightly from 160 to 154, bringing the previous upward trend to an end. Trade saw the largest increase in bankruptcies (+13), while construction (-11) and industry (-9) recorded the biggest declines. According to Partner Annika Peetsalu and Associate Heivo Reinek, companies continue to cite high input costs and weak demand as the main reasons for financial difficulties. They also note that, regrettably, there are still cases indicating attempts to shift debts into one entity while transferring business activities to another.
Reorganisation proceedings in Estonia fell sharply, from 28 to 9, suggesting that the previous surge has subsided. According to Peetsalu and Reinek, one discouraging factor may be seeing companies under restructuring ultimately end up in bankruptcy. “This, however, does not reflect inefficiency in reorganisation proceedings, but rather late reactions by companies in the past.” Encouragingly, all reorganisation proceedings initiated in 2025 have so far concluded successfully.
Latvia also experienced a moderate decline in insolvency activity. Company insolvency proceedings decreased from 283 in 2024 to 269 in 2025, and fewer restructuring proceedings were opened. The number of restructuring cases declined year on year, from 137 in 2024 to 127 in 2025. According to Specialist Counsel Mārtiņš Aljēns, this may indicate that financial pressure has eased slightly or that companies are more cautious about initiating formal restructuring.
At the same time, despite fewer overall filings, there was a notable increase in restructuring plans approved by Latvian courts, rising from 28 in 2024 to 39 in 2025. “This may indicate better-quality restructuring proposals, more active creditor involvement or a more pragmatic judicial approach to business recovery,” says Aljēns.
In Lithuania, bankruptcy proceedings decreased by nearly 10% in the first half of 2025 compared to the previous year. The most significant decline occurred in the transportation and storage sector, where 37 fewer bankruptcy proceedings were initiated. “This change may have been influenced by the exceptionally high number of cases in the same sector in 2024,” note Partner Dr Paulius Markovas and Senior Associate Dr Ieva Strunkienė. The largest number of bankruptcy proceedings in the first half of 2025 were initiated in the wholesale and retail trade and construction sectors.
At the same time, restructuring activity increased significantly in Lithuania. In the first half of 2025, the number of restructuring cases rose by 89.5% compared to the first half of 2024, reaching a total of 36 cases, of which eight were later cancelled. This equals the total number of restructuring proceedings initiated during the entire year of 2024. The increase was largely driven by the large-scale restructuring of AUGA Group and its subsidiaries.
Across all three countries, bankruptcy numbers are no longer rising as rapidly as before. However, financial strain remains visible. Early intervention, transparent restructuring strategies and careful risk management are therefore becoming more important than ever.
