The Cabinet of Ministers offers to simplify bankruptcy proceeding 

The Verkhovna Rada currently considers the draft law of the Cabinet No 7448 dated 26 December 2017 «On amendments into certain laws of Ukraine related to simplification of bankruptcy proceeding» (hereinafter – the «Draft law»).

The Draft law focused on the simplification of bankruptcy proceeding, in particular access to such procedures.

We propose to discuss that will change if the draft law is supported by the Members of Parliament.

The release of debtors from payment of court fees.

At present, the debtor must pay a court fee for filing a bankruptcy petition at the same level as the creditor do.

We remind you that the amount of court fee of filling such a petition is a ten minimum subsistence rate for able-bodied persons (17 000 грн.).

The Draft law proposes to amend the subparagraph 9  paragraph 2 of part 2 of article 4 of the Law of Ukraine «On court fee», establishing that in the event of  filling a bankruptcy petition to commercial court, the payer of court fee is the creditor.

If the Draft law is adopted, the debtor will not pay court fee of filling a bankruptcy petition.

No Need to wait three months for initiation of proceeding

The Law of Ukraine «On restoring a debtor solvency or declaring a debtor bankrupt» (the – «Law») defines the debtor as a business entity, that is unable to perform the monetary obligations within 3 months after the offensive established term for their execution.

The existence of a fact of delay within 3 months, that confirm the decision and resolution on the initiation of enforcement proceeding is the compulsory condition for initiation of bankruptcy proceeding.

The Draft law provides an exception from definition of «debtor» such a characteristic as debtor inability to perform the monetary obligations within 3 months after the offensive established term for their execution. The existence of this characteristic also will not be condition for initiation of the bankruptcy proceeding.

Cancellation of the barrier of 300 minimum wages

Another novel of the Draft law is cancellation of creditor`s or debtor`s obligation to attach to bankruptcy petition the evidence of indisputable demands of amount of not less 300 minimum wages.

It is anticipated that such amendments will prevent the accumulating of debtor`s debt before creditors.

Indisputable requirements

The Draft law proposes to change the characteristics of indisputable requirements.

Now, the monetary claim is considered undisputable if it is a monetary claim which is simultaneous confirmed by the judgment (that came into force) and by resolution on initiation of enforcement proceeding; but according to the Draft Law it is enough to obtain only judgement or resolution on initiation of enforcement proceeding to acquire the “indisputability”.

In addition, it is proposed to include as another and independent reason to recognize the demand as undisputable the fact of confirmation of the demands  by the debtor. That is, if the debtor accepted the demands, it means they are indisputable and the judgment is not required.

The conditions of creation the creditor committee were amended

The Draft law resolves the issue of creation the creditor committee. It is anticipated that in case total quantity creditors do not exceed seven persons, all creditors are automatically included in the creditor committee.

Compliance with self-liquidation procedure

The Draft law provides the cancellation of the paragraph 2 part 1 of article 95 the Law which defined that compulsory condition of filling a bankruptcy petition to commercial court is debtor`s compliance with liquidation procedure of the legal entity according to Ukraine legislation.

Consequently, in the event of adoption of the Draft law, the courts will not check compliance with the self-liquidation order in case of initiation of the bankruptcy proceeding.

Instead of conclusion

Summing up, it should be mentioned that the Draft law provides many positive amendments aimed to improvement of bankruptcy procedure and removal of barriers to access to this procedure.

At the same time, the Draft law does not deal with many obvious and urgent problems. In particular, the issues of payment for the services of insolvency practitioner, procedure for the sale property, clear separation of creditors meeting and creditors committee competency etc.

We hope that these issues will not be left without attention and in the near future such amendments will be the subject of consideration by the VRU.