New version of the Law on Bankruptcy

/23
January 2013

 

On January 19, 2013 the Law of Ukraine ‘’On amendments to the Law of Ukraine ‘’On reestablish debtor solvency or recognizing him a bankrupt’’ dated December 22, 2011 № 4212-VI (hereinafter – the Law) came into force.

The new version of the Law has seriously changed approach to creditor’s status in bankruptcy procedure and classified creditors as competitive, current and guaranteed. Herein, competitive creditors are the creditors having requirements to the debtor, that arose prior to the bankruptcy procedure beginning, and execution of which  is not secured by the pledge of the debtor`s assets. Current creditors are the creditors having requirements to the debtor that arose after the bankruptcy procedure beginning. Guaranteed creditors are the creditors whose requirements are secured by the pledge of the debtor`s assets.  Assets of a bankrupt, which are subject of security, shall not be included into liquidation estate and shall be used exclusively to satisfy demands of guaranteed creditors. Pledged assets can be sold only upon relevant pledge holder or court prior approval. The liquidation estate includes only funds remaining after satisfaction of the pledge holders` demands. Thereof the guaranteed creditors have exclusive priority right comparing with other creditors.

The Law modernized the ways of publication of bankruptcy information. Information about all bankruptcy procedures shall be gathered on the official website of the Supreme Economic Court of Ukraine. However, no certain term of such publication was prescribed for now. Nevertheless creditor can file their requirements within 30 days after official bankruptcy publication.

Amendments have established the quorum for the creditors meeting. The first meeting of creditors shall be considered eligible if it is attended by creditors holding at least two thirds of votes. The next meetings shall be valid if there are creditors holding more than half of the votes present on it.

 Also, the Law makes some adjustments to the legal status of insolvency officers, recognizing individual entrepreneur a bankrupt, etc. Meantime the idea of possibility to recognize as bankrupt an individual, who is not involved in entrepreneurial activity, was not reflected the Law.