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Bankruptcy
Bankruptcy (procedure of bankruptcy) may be used as a tool either
for protection of legal entities against their creditors or for
protection of the interests of creditors. Bankruptcy may be initiated
either by force (with the judgement by the court) or voluntarily
with the resolution by the body of management of a legal entity
to be appropriately authorised by the laws and constitutive documents.
FORPOST Legal Consulting Firm provides the services for support
of the procedure of bankruptcy and represents the client's interests
at all the stages of bankruptcy, at the courts and other governmental
authorities.
Bankruptcy: complex services.
Bankruptcy means the legally prescribed procedure regulating the
provisions of measures to be carried out for prevention of insolvency
(bankruptcy), order for arrangement of the procedures of bankruptcy,
and any other relations, which may arise if the debtor cannot satisfy
the claims of creditors in the full amount.
In practice, realisation of rights both by the creditor and by
the debtor is complicated with the problems of legal and economic
nature. FORPOST Legal Consulting Firm provides the following complex
services related to the procedure of business bankruptcy:
- provision of the legal analysis of the corporate business;
- legal support of the interests of creditors, in particular,
in the meetings of creditors and in the terms of the court of
arbitration;
- protection of the legal interests of debtor and shareholders
(members) thereof, in particular, in the terms of the court of
arbitration;
- provision of analysis, estimation, objection of the transactions
affecting the solvency of debtor;
- initiation of the procedure of bankruptcy;
- support of the relations with the arbitration manager; and
- provision of all the necessary documents for the procedure
of bankruptcy.
Bankruptcy: legal basis.
The major procedures of bankruptcy are as follows:
- observation as the procedure of bankruptcy to be applied to
the debtor in order to provide protection of the debtor's property,
provision of analysis of the debtor's financial condition, compilation
of the register of claims of creditors and arrangement of the
first meeting of creditors;
- financial rehabilitation as the procedure of bankruptcy to be
applied to the debtor in order to restore the debtor's solvency
and to repay the debts to all the creditors, in accordance with
the debt repayment schedule to be approved by the court of arbitration;
- external administration as the procedure of bankruptcy be applied
to the debtor in order to restore the debtor's solvency; the maximum
term of external administration is two years;
- tender proceedings as the procedure of bankruptcy to be applied
to the debtor, whose bankruptcy was recognised, in order to satisfy
proportionally the claims of creditors; the term of tender proceedings
is one year; and
- amicable agreement as the procedure of bankruptcy to be applied
at any stage in consideration of the case of bankruptcy in order
to terminate the proceedings of the said case of bankruptcy with
the agreement to be achieved by and between the debtor and the
creditors.
In accordance with Section 6 of the Federal Insolvency (Bankruptcy)
Act, the cases of bankruptcy are considered by the court of arbitration.
Settlement of the case of bankruptcy by the court may produce
the following results:
- liquidation of the debtor;
- sale of the debtor's business;
- amicable agreement with the creditors; or
- financial rehabilitation of business.
In accordance with Section 2 of the Federal Insolvency (Bankruptcy)
Act, insolvency (bankruptcy) means the inability of the debtor,
which is recognised by the court of arbitration, to satisfy the
claims of creditors in the full amount of monetary obligations and
(or) to fulfil the obligation of making the due payments.
A debtor means an individual, in particular, an individual business
person or a legal entity becoming unable to satisfy the claims of
creditors in the full amount of monetary obligations and (or) to
fulfil the obligation of making the due payments within the terms
prescribed by the Federal Insolvency (Bankruptcy) Act.
Creditors are persons having the rights of claim to the debtor
with respect to monetary obligations and other liabilities, provision
of due payments, payment of retirement allowances and labour remuneration
of the persons working under the employment contract.
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