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Protection of debtors' interests in bankruptcy cases of legal entities

Legal entities - business entities, their managers and owners should pay special attention to protecting their interests in caseof problems with the timely fulfillment of monetary obligations.

The Code of Ukraine on Bankruptcy Procedures was adopted in 2019. This Code finally introduces a “pro-creditor” ideology in insolvency (bankruptcy) cases.

Currently, there are no minimum restrictions on the amount of a creditor's claims for initiating proceedings in a bankruptcy case of a legal entity, there is no need for preliminary debt collection in court and opening enforcement proceedings. If the creditor has undisputed claims, the case can be initiated at any time.

A new "trend" is holding the manager, owners, and beneficiaries of the debtor to joint and severally or subsidiary responsibility for inaction in the event of a threat of insolvency or for actions that made it impossible to satisfy creditors' claims.

In order to protect one`s interests and prevent the occurrence problems, it is necessary to conduct an analysis of the company's business activities and financial condition in order to prepare for the possible opening of bankruptcy proceedings, and if necessary, to independently apply for insolvency (bankruptcy).

An irreparable mistake can be attempts to "rewrite" property or property rights to other controlled entities or to re-register the enterprise as a "pound" as a result of the so-called "express liquidation".

The bankruptcy procedure will provide creditors with special additional grounds for the returingn "withdrawn" property. Such actions of the debtor will become sufficient grounds for holding the owners and officials personal property (and possibly criminally) responsibility. Creditors will gain full control over the enterprise, and the newly appointed "pound" will not be interested and able to protect itself and "its" legal entity.

The correct action in case of impossibility of paying creditors' monetary claims would be to use the mechanisms provided for by the Code of Ukrainian Bankruptcy Procedures.

Optimizing your business activities, correctly assessment of the financial condition, and, if necessary, independently submission of an application to open bankruptcy proceedings will exclude the possibility of holding the debtor's manager and owners personally responsibility, may allow restructuring debts and preserving property, or declare the debtor bankrupt and legally terminate business activities.

The Bankruptcy Code of Ukraine defines the following procedures (stages of consideration) in insolvency cases for legal entities:

Pre-trial rehabilitation of the debtor.
Property management.
Sanitation.
Bankruptcy – liquidation.

Lawyers and arbitration managers who are part of our team have more than ten years of experience in restoring the solvency of debtors or declaring them bankrupt and can provide the following services to protect the interests of the creditor:

Protection of the interests of the debtor, the debtor's manager and owners (shareholders).
Analysis of the debtor's financial condition and economic activities.
Providing recommendations for optimizing business activities.
Development and submission of an application to initiate insolvency proceedings.
Representation of debtors at creditors' meetings and creditors' committee meetings.
Representation of debtors' interests in court.
Restoration of solvency (rehabilitation) of the debtor.
Liquidation of legal entities with debts.
Appointment in insolvency cases of a property administrator, rehabilitation manager, restructuring manager, sales manager, liquidator.
Suspension, replacement of the arbitration manager in insolvency cases.

The professional services of our lawyers and arbitrators will allow you to fully utilize all the advantages of an insolvency (bankruptcy) case.

Advantages of insolvency (bankruptcy) proceedings for the debtor

Introduction of a moratorium on satisfying creditors' claims, suspension of the accrual of interest, penalties, and fines.
Suspension of enforcement proceedings.
All disputes regarding the debtor's property are considered within the bankruptcy case in one court.
The possibility of terminating business activities in the presence of outstanding debts to counterparties, payment of taxes or fees.
the ability to sell collateral and mortgages owned by the debtor.
Possibility of preserving the enterprise through the rehabilitation procedure.
Ability to settle debts without paying penalties - fines, penalties.
Possibility of debt restructuring or write-off.
The possibility of holding accountable those responsible for bringing the enterprise to insolvency.
Additional grounds for invalidating transactions for the return of the debtor's property.

Despite the fact that the Code of Bankruptcy Procedures of Ukraine is aimed at protecting the rights of creditors, the debtor has a significant advantage - unlike creditors, he personally controls the enterprise without restrictions before the initiation of bankruptcy proceedings and has time to prepare for bankruptcy proceedings. It would be wise to use this advantage.

We know how to use your capabilities to solve your problems.