| 01 | it is more profitable for you to start the company’s bankruptcy procedure than to repay the debt to counterparties |
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Bankruptcy and liquidation
Bankruptcy is a legal procedure that provides an opportunity for a Debtor who is unable to fully repay his monetary obligations to creditors, to restore his solvency or to terminate a legal entity by liquidating it.
For which companies is bankruptcy suitable?
for enterprises that have significant debt to the budget and/or counterparties
for creditors who want to collect their debt from an insolvent enterprise
| 02 | the timely initiated bankruptcy procedure relieves the manager of joint and several liability for the company’s debts |
| 03 | the procedure is beneficial to both the creditor and the debtor |
| 04 | the creditor gets the opportunity to collect the debt from the insolvent enterprise |
| 05 | it is not necessary to conduct an unscheduled inspection of the taxpayer by the state tax service |
| 06 | the imposition of economic sanctions on the debtor is suspended, the arrest is removed from the property, and the penalty is suspended. |
Disadvantages: duration of the procedure
Court procedures applied to the Debtor - a legal entity, within the framework of the bankruptcy case:
disposal of the debtor's property
rehabilitation of the debtor
bankruptcy liquidation
| 01 | the term and procedure for creditors regarding the application of monetary claims to the Enterprise is established |
| 02 | a restriction on actions in the UDR is introduced |
| 03 | the court conducts the procedure for the disposal of property in relation to the Enterprise and appoints the administrator of the property (this is an independent subject of professional activity that analyzes the financial and economic condition of the Enterprise, conducts measures to identify the assets and liabilities of the Enterprise) |
| 04 | a restriction is introduced regarding the disposal of the Enterprise’s property by its management bodies (conclusion of contracts, etc.) |
| 05 | information on the opening of bankruptcy proceedings regarding the Enterprise is entered in the EDR |
| 06 | the accrual of fines shall cease |
| 07 | a moratorium on meeting creditors’ demands is introduced |
| 08 | executive proceedings regarding the Enterprise are stopped, except for those that are at the stage of property realization and executive proceedings regarding the collection of salary arrears |
| 09 | decision-making regarding the transition to the next court procedure is assigned to the competence of the Meeting of Creditors and the Committee of Creditors |
The procedure for the disposal of the debtor's property is introduced for a period of up to 170 calendar days, until the completion of the procedure for the disposal of the debtor's property.
The meeting of creditors makes one of two decisions regarding the transition to the following court procedure:
approve the rehabilitation plan and submit to the commercial court a petition for the introduction of the rehabilitation procedure and approval of the rehabilitation plan (restoration of solvency);
file a motion with the commercial court to declare the debtor bankrupt and open liquidation proceedings.
In the event that the Meeting of Creditors does not make any of the stipulated decisions within the validity period of the property disposal procedure, the commercial court, in the presence of signs of bankruptcy, within five days after the end of the debtor's property disposal procedure, adopts a resolution declaring the debtor bankrupt and opening the liquidation procedure.
Liquidation procedure:
If, during the bankruptcy procedure, it is established that the Enterprise has more liabilities than assets and it is not considered possible to restore its solvency, the court will declare it bankrupt and conduct a liquidation procedure against it, with the aim of terminating the legal entity.
The liquidation procedure is aimed at the final sale of all assets of the Enterprise, with the aim of repaying creditor claims, in accordance with the register of claims of creditors of the Enterprise, repayment is carried out in turn, to all creditors of the same queue at the same time, in case of insufficient funds to repay the entire queue, repayment takes place in proportion to the requirements creditors of this turn.
However, the liquidation procedure has a number of its own features, namely:
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the court appoints the liquidator of the Enterprise, from among the persons who have a certificate of the arbitration manager, to whose custody the Enterprise with all its assets is transferred; |
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the powers of all management bodies of the Enterprise are terminated, all employees are dismissed; |
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the economic activity of the Enterprise is terminated; |
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founders, participants, shareholders of the Enterprise will lose their property/corporate rights in relation to the Enterprise; |
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all property assets of the Enterprise are to be sold at auction, the funds received from the sale are directed exclusively to the repayment of creditors’ claims, the payment of the remuneration of the arbitration administrator, who performs the powers of the liquidator, and reimbursement of expenses incurred by him in the bankruptcy case; |
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the liquidator carries out measures related to the return of the Company’s property assets (collection of receivables, claim of property, etc.); |
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the liquidator conducts an analysis of the financial and economic condition of the Enterprise for three years prior to the opening of the bankruptcy case, with the aim of identifying facts leading to bankruptcy. In case of discovery of facts leading to bankruptcy of the Enterprise, the liquidator applies to the court with a statement to impose subsidiary liability on the manager, founder, participant, shareholders or other persons who have the right to give binding instructions to the Enterprise or are able to otherwise determine its actions, in the amount of outstanding creditor claims); |
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the liquidator analyzes the transactions of the Enterprise for the three years preceding the bankruptcy case, in case of discovery of facts that led to the violation of the rights of creditors (allocation of the company’s assets at prices lower than market prices, etc.), the liquidator applies to the court with a statement on the recognition of such transactions not valid; |
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the commercial court, in whose proceedings the bankruptcy case is pending, resolves all property disputes in which the Enterprise is a party within the scope of this case; |
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all bank accounts of the Enterprise are closed; |
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personal documents are transferred to the labor archive for storage. |
Consequences of the completion of the liquidation procedure:
information about the termination of the Enterprise is entered in the EDR;
the Enterprise’s debts are considered fully repaid;
Therefore, the termination of the Enterprise in the bankruptcy procedure is a valid and legal way of liquidation of a legal entity that will not be able to fully repay its creditors on its own.
We will assess the prospects of winning your case.
We solve tasks and issues of varying degrees of complexity with special attention and responsibility.
We solve tasks and issues of varying degrees of complexity with special attention and responsibility.
| 01 | a record of the termination of the activity of a bankrupt legal entity in the Unified State Register of Legal Entities and Phys. entrepreneurs; all debts will be considered discharged |
| 03 | the arrest imposed on the debtor’s property will be cancelled |
| 04 | the imposition of new arrests and other restrictions on the disposal of the bankrupt’s property is not allowed; |
| 05 | you will save your time, because you will avoid long delays in queues to government offices |
Liquidation of the enterprise is carried out in compliance with all norms established by the legislation of Ukraine. If violations are detected at any of the stages, the liquidation procedure can be stopped until the deficiencies are eliminated. At any of the stages, the high-quality help of experienced lawyers may be necessary. A properly conducted bankruptcy and liquidation procedure will help prevent debts to creditors or debts to the state tax service, additional fines. After a properly conducted procedure for terminating the enterprise, its owner and co-owners have the opportunity to open new enterprises with the same or other forms of ownership.
IMPORTANT!
*The cost of services within the limits is determined individually, taking into account the specifics of your activity and upon agreement with the Client.
*The cost of services within the limits is determined individually, taking into account the specifics of your activity and upon agreement with the Client.
Liquidation of an enterprise within the bankruptcy procedure is a complex task that requires qualified legal support. The DIPLOMAT law firm is ready to provide the necessary legal support, ensuring a smooth process, protecting your interests and paving the way to future financial stability. Contact us today, and our experienced lawyers will help you go through the liquidation process in Ukraine.
Do not delay, apply and get guaranteed qualified legal assistance.
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