Insolvency and Bankruptcy

Competent application of bankruptcy law enables both a debtor and a creditor to protect their interests. This is a very convenient legal avenue for those who knows how to use it for own benefit.

Ukrainian legal practice provides for several major cases when a company bankruptcy procedure is initiated. First of all, bankruptcy is a method intended to give a debtor an opportunity of undergoing a financial sanation procedure, making settlements with its creditors and starting business activity ‘with a clean slate’. In this case, a bankruptcy procedure is initiated by the debtor itself. The Law of Ukraine ‘On Restoration of Debtor’s Financial Solvency or Its Acknowledgement as a Bankrupt’ implies moratorium on satisfaction of creditors’ claims since the beginning of bankruptcy proceeding.

There is one more possibility to apply bankruptcy for the debtor’s interests – simplified liquidation of an enterprise. Unlike the standard procedure of enterprise liquidation, bankruptcy proceeding does not require any tax inspections. Moreover, liquidation through bankruptcy may be completed much quicker than the standard procedure. Another popular variant is assignment of assets in the course of bankruptcy. For this, it is enough to approve of an enterprise sanation plan, within the framework of which the debtor’s property is assigned to the companies incorporated specially for such purpose.

However, even in the course of usual bankruptcy proceeding, lots of complications may arise as any of the creditors may do its best to return its money. For example, large number of cases is initiated by tax authorities and/or pension fund divisions, which act within the approved general patterns and do not take much interest in successful bankruptcy proceeding.

Effective implementation of all these patterns depends on qualification of an insolvency receiver who may be literally called a key participant of bankruptcy procedure.

‘KD CONSULTING’ legal & consulting firm provides a full range of services related to bankruptcy and financial sanation, including initiation of bankruptcy procedure, setting claims and participation in creditor committee, disposal of property, conclusion of settlement agreements, sanation of an enterprise and its liquidation. We have a qualified insolvency receiver in our team, who has a large experience in the sphere of bankruptcy gained through participation in bankruptcy proceedings both on the debtor’s and creditor’s part.