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Insolvency Proceedings

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BANKRUPTCY APPLICATION AND LIST OF DEBTS

Bankruptcy is the financial insolvency of the debtor declared by a court of law.

A legal person is insolvent if its property is not sufficient to cover its obligations, and this condition (considering the economic situation of the debtor) is not temporary.

A bankruptcy application can be submitted by a debtor or by a creditor.

For instance, if a debtor is insolvent and considering its economic situation this condition is not temporary, then the management board shall immediately, within 20 days after establishing the insolvency, submit the respective bankruptcy application to a court of law.

  1. In the bankruptcy application the debtor shall prove its financial insolvency.

In order to prove it, the debtor shall also submit a written explanation of the reasons for insolvency (explanatory note) and a list of debts (a list of creditors). The list of debts shall indicate all the creditors with their claims as well as information on the debtor’s assets. The explanatory note and the list of debts shall be signed by the debtor.

According to law the bankruptcy application may be obligatory for a debtor in certain cases (for instance, in the process of liquidation, where the property of the liquidated company is insufficient to satisfy the claims of all creditors, the liquidators must file for bankruptcy).

A bankruptcy application filed by a debtor that is a legal entity may be signed by any member of the management board (director) or a substitutive body (e.g. a member of the council).

  1. In the bankruptcy application the creditor shall prove the fact of insolvency of the debtor and the grounds for the claims.

Competent support during the bankruptcy proceedings offers:

–       for a debtor the opportunity to get rid of very heavy obligations, or to protect its interests, for instance, against unreasonable bankruptcy petition;

–       for a creditor the opportunity to protect its proprietary interests.

Within the scope of the bankruptcy proceedings we can draw the necessary documents to be submitted to a court of law, and we are ready to represent a client in a court for the protection of his interests. Timely committed legal actions can be critical to achieving this goal.

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