Publication date: 08.06.2024
Protection of creditors' rights in bankruptcy proceedings
Introduction
The bankruptcy procedure is a complex and multi-stage process that affects the interests of various parties, including creditors. The protection of creditors' rights in bankruptcy proceedings is an important aspect, as it affects the possibility of debt repayment and the stability of financial relations. In this article, we will analyze the main legal mechanisms for protecting the rights of creditors in bankruptcy proceedings in Ukraine, current issues and prospects for improving the legislation.
Legal framework
The Bankruptcy Code of Ukraine:
- The main legal act regulating bankruptcy and insolvency of enterprises. It defines the procedure for initiating bankruptcy proceedings, the rights and obligations of the parties, and the mechanisms for protecting the rights of creditors.
The Civil Code of Ukraine:
- Contains provisions relating to general principles of fulfillment of obligations, liability for failure to fulfill contractual obligations and the procedure for satisfying creditors' claims.
Creditors' rights in bankruptcy proceedings
Filing for bankruptcy:
- Creditors have the right to initiate bankruptcy proceedings by filing a petition with the commercial court. This allows creditors to begin the process of debt collection in the event of the debtor's insolvency.
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Participation in the creditors' committee:
- Creditors may form a creditors' committee to represent their interests in bankruptcy proceedings. The committee has the right to participate in decision-making on the rehabilitation plan, liquidation of the debtor's property and other key issues.
Satisfaction of creditors' claims:
- Creditors' claims are satisfied in the order of priority established by law. Claims for payment of salaries to employees, alimony and other social benefits are satisfied first.
Appealing against decisions and actions of the insolvency receiver:
- Creditors have the right to appeal against the actions and decisions of the insolvency officer (liquidator) if they believe that their rights have been violated. This may include challenging the valuation of the debtor's property, the procedure for its sale, etc.
Protective mechanisms for creditors
Financial control:
- The insolvency officer exercises financial control over the debtor's activities during the bankruptcy procedure, which ensures transparency and efficiency of the process.
Seizure of property:
- Creditors may request the seizure of the debtor's property to prevent its illegal alienation. This ensures that assets are preserved for further satisfaction of creditors' claims.
Debt rehabilitation and restructuring:
- The legislation provides for the possibility of rehabilitation and restructuring of debtor's debts, which allows avoiding liquidation of the company and ensuring partial or full satisfaction of creditors' claims.
Challenges and prospects
Low efficiency of bankruptcy procedures:
- Bankruptcy proceedings are often delayed, which leads to a decrease in the value of the debtor's assets and a reduction in the ability to satisfy creditors' claims.
Corruption risks:
- Corruption and dishonest actions of insolvency receivers may violate the rights of creditors, which requires strengthening control and liability for such actions.
