Bankruptcy of an Enterprise
Bankruptcy refers to the inability of a company to conduct business activities due to lack of funds and, as a consequence, the impossibility of payment under its debt obligations.
The enterprise bankruptcy procedure is directed not only at the liquidation of the enterprise but also at its financial rehabilitation. The latter provides for a complete financial recovery of the company and its subsequent development in the future.
Bankruptcy of enterprises in Ukraine is a popular tool in the fight against financial difficulties of companies that is widely used by many representatives of business throughout the world.
In order to meet the interests of a debtor's creditors, an integrated mechanism is triggered, which includes the enforcement of court procedures for disposing of property, the liquidation of an enterprise, the signing of a settlement agreement, and the restoration of the company's solvency (financial rehabilitation).
Liquidation of an Enterprise
The procedure for the liquidation of an enterprise is the most common measure when initiating a bankruptcy case.
The law says that "financially afflicted" companies are subject to rehabilitation. Consequently, the liquidation of enterprises occurs only when solvency cannot be restored.
The main objective of the liquidation procedure is to implement a whole range of measures with the sole purpose of meeting creditors' claims on a fair and proportionate basis.
Repayment of accounts payable is possible only due to the use of the debtor's assets, which can be identified, retained, and subsequently sold by a bankruptcy administrator.
Consistent and lawful actions in the course of disposition of a debtor's property work to preserve and to effectively use the debtor's assets. For example, when applying this mechanism, it is possible to stop the action of financial measures (penalties etc.), which is caused by the entry of the moratorium on the satisfaction of creditor claims into force.
A unique way to settle a relationship is to sign a settlement agreement. After the settlement agreement is concluded, the proceedings are stopped, and the parties receive an effective solution that meets their claims.
// THE SETTLEMENT AGREEMENT CAN BE CONCLUDED REGARDLESS OF THE STAGE OF CONSIDERATION OF A BANKRUPTCY CASE
As an enterprise official, a bankruptcy administrator is obliged to assume the functions of the implementation of economic activities of the company and document circulation as well as to fulfill the requirements regarding the identification of creditors, implement financial rehabilitation, organize the sale of the debtor's property and the liquidation procedure, and, in case of violations of the law, to notify representatives of law enforcement agencies.
The bankruptcy administrator accompanies all the stages of bankruptcy and financial rehabilitation of the enterprise and is endowed with appropriate powers of the director of the company and fulfills all the orders of the economic court proceeding from the provisions of the current legislation.
The bankruptcy administrator will:
- analyze financial and economic activities of the company;
- search for debt restructuring options;
- verify the legitimacy of the claims of creditors;
- resort to measures aimed at preserving the debtor's property;
- offers options for resolving conflicts between the client and the creditor(s);
- provide the necessary information to relevant bankruptcy authorities for entry into a single database.
As an uninterested person acting within the framework of the Law, the bankruptcy administrator in Kyiv has the right to send inquiries to obtain the necessary information from state registers, to receive materials from other legal entities, and, in certain cases, to involve specialized structures.
Legal support for the process of restoration of the debtor's solvency is considered both on the part of the debtor and on the part of the creditor.
Our qualified specialists:
- have special knowledge in bankruptcy cases;
- have many years of experience in supporting the liquidation of enterprises in Dnipro City and in other regions of Ukraine;
- understand the legal specifics of the position of courts and state bodies;
- are provided with due technical support.
// AND ACHIEVE THE ESTABLISHED OBJECTIVES WITHIN REASONABLE TERMS
Financial Rehabilitation of an Enterprise
Financial rehabilitation of a company is performed in order to prevent the debtor from being declared bankrupt and has a number of peculiarities.
The decision on the initiation of a financial rehabilitation procedure is adopted by the creditors' committee, which consists of competitive creditors (in case of the use of the general financial rehabilitation procedure), or by the director of the debtor company (in case of the use of a simplified financial rehabilitation procedure).
Fulfillment of the debtor's obligations, repayment of arisen debts with subsequent financial recovery and continuation of the economic activity of the enterprise is possible only if the financial rehabilitation program is implemented in strict compliance with requirements of the current regulations. An incorrectly chosen strategy can aggravate an already shaky position of an enterprise.
Competent support and implementation of the bankruptcy procedure and financial rehabilitation of an enterprise is impossible without the availability of specialist knowledge in various sectors of the economy, finance, and accounting as well as without general legal support for each stage of the process.
// UNDERSTANDING THE WHOLE PROCEDURE AND CONSIDERATION OF PECULIARITIES OF EACH OF THE PARTIES WILL PROVIDE THE EXPECTED RESULT