Initiation of company bankruptcy

ECOVIS Miškinis, Kvainauskas ir partneriai advokatų kontora

(continued from previous issue)

Upon making a decision to institute bankruptcy proceedings, the court or the judge must:

1) appoint an administrator for the enterprise;

2) levy an attachment against the immovable property and other fixed tangible assets of the enterprise, in force until the effective date of the court decision to institute bankruptcy proceedings;

3) give forthwith a written notification of the instituted proceedings to the register of legal persons, the enterprise (and the creditors, if the decision is made in written proceedings), other related bodies;

4) notify other courts in which action for claims, including claims arising from employment relationship, has been brought against the enterprise, of the institution of bankruptcy  proceedings and take over investigation of the above cases. Inform other state institutions;

5) set a time limit which shall be not shorter than 30 days and not longer than 45 days from the effective date of the court decision within which the creditors shall have the right to file their claims which arose prior to the day of institution of bankruptcy proceedings against the enterprise;

6) set a time limit which shall be not shorter than 15 days from the effective date of the court decision to institute enterprise bankruptcy proceedings, within which the enterprise’s managing bodies must transfer to the administrator the assets of the enterprise according to the financial accounts drawn up, based on the data available on the day on which the decision to institute bankruptcy proceedings becomes effective, and all the documents;

7) approve the amount of enterprise funds on the basis of an estimate submitted by the administrator, which the latter shall be entitled to use to cover the administration costs pending the approval of the estimate of administration costs.

The administrator must submit the estimate within 5 working days from the effective date of the court decision to institute bankruptcy proceedings.