The appointment of a bankruptcy administrator for a company

ECOVIS Miškinis, Kvainauskas ir partneriai advokatu kontora

The Law on Enterprise Bankruptcy of the Republic of Lithuania (hereinafter – the Law on Enterprise Bankruptcy) provides that a court or a judge who has made a decision to institute bankruptcy proceedings must appoint the bankruptcy administrator for the enterprise (Article 10 Part 4 Point 1 of the Law on Enterprise Bankruptcy). The bankruptcy administrator can be an individual or a legal entity. The persons who are filing a petition or are entitled to provide the petition for the institution of the enterprise bankruptcy proceedings shall suggest to the court the candidate for the bankruptcy administrator for the enterprise.

However, only the court is authorized to appoint the bankruptcy administrator. The right granted to the court ensures that there will be appointed a bankruptcy administrator who will provide the bankruptcy administration services properly, impartially and in a qualified manner. Accordingly, the court must appoint such bankruptcy administrator who meets the requirements of Article 11 of the Law on Enterprise Bankruptcy, which means that the appointed bankruptcy administrator must have a right to provide the administration services (he must have a qualification certificate, be covered by the civil liability compulsory insurance, etc.).

The court practice provides that during the process of the appointment of the bankruptcy administrator the court shall estimate circumstance which have a hold on the appointment of the bankruptcy administrator for the enterprise (the court shall take into account the size of the enterprise, which kind of assets the enterprise has and their control, how many workers and creditors the enterprise has, etc.). If the enterprise is large and has many workers with substantial capital, it is necessary to appoint an administrator with the right qualifications and experience for conducting the bankruptcy proceedings.

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