The lower house of Parliament voted 175–0 in favor of the bill Feb. 8, thanks largely to support from the country's two most powerful political parties: the leading Social Democrats (ČSSD) and the opposition Civic Democrats (ODS).

The measure was set to go to the Senate Feb. 15. Experts say it should also have support there from both parties.

"It looks like it's going to be passed in the Senate because there's an accord between the opposition and the government," says Jan Mráček, a legal analysts at europlatform, which monitors political and economic developments in the Czech Republic. "The crucial point is that the Chamber of Deputies passed the bill. I don't see many more obstacles."

Politicians, business and legal experts say the measure would improve Czech insolvency legislation and make the country more attractive to investors by giving creditors, not judges, the majority of power in bankruptcy proceedings.

The bill would allow, for example, secured creditors (usually banks) to recoup up to 100 percent of their investment in insolvent companies instead of 70 percent, the amount set by the current legislation.

Business organizations have long criticized the current law for putting too much control in the hands of the judiciary, which insolvency experts say leads to excessively lengthy and costly bankruptcy proceedings that often end in liquidation and discourage investment.

The new reform bill is the result of a compromise agreement between the ČSSD-led Cabinet and the ODS. Last year, Martin Jahn, then-deputy prime minister for the economy, and the ODS submitted two individual bills, both based on the principle of strengthening creditors' rights, to the Cabinet.

It was widely believed the bills would be merged in Parliament. And on Jan. 20, Jiří Havel, the former adviser to Prime Minister Jiří Paroubek who took over Jahn's post in January, announced exactly that.

The agreement is arguably one of the most significant developments in Czech bankruptcy reform, which began more than five years ago and has been an ongoing battle between political and economic factions.

Many reform proposals have failed over the years, and even the current measure had to struggle through endless negotiations in the Cabinet last year and confrontation with the ODS this year.