ECOVIS Miškinis, Kvainauskas ir partneriai advokatu kontora
According to the Law on Enterprise Bankruptcy of the Republic of Lithuania (hereinafter – the Law on Enterprise Bankruptcy), bankruptcy means the state of an insolvent enterprise, where bankruptcy proceedings have been initiated in court or the creditors are performing extrajudicial bankruptcy procedures in the enterprise.
Lithuanian legal doctrine and case law provide that the purpose of the bankruptcy process is to settle the creditors’ claims from the assets of the bankrupt company, to liquidate the debts of the enterprise, as well as to protect the creditors from the longer delay in the settlement of the bankrupt enterprise.
The bankruptcy process in Lithuania is regulated by the Law on Enterprise Bankruptcy. A petition for the initiation of the enterprise bankruptcy proceedings shall be filed by the following persons:
1) the creditor or group of creditors of the enterprise;
2) the owner or owners of the enterprise;
3) the head of administration of the enterprise.
Under the condition mentioned in Article 7 Part 1 of the Law on Enterprise Bankruptcy - if it transpires during the liquidation of the enterprise that it will be unable to discharge all its liabilities - the enterprise liquidator must forthwith suspend all payments and within 15 days from the day of establishment of the above state, file for initiating the enterprise bankruptcy proceedings.
The petition shall be filled with the county court of the locality in which the enterprise is registered.
(continued next week)