The new Code of Ukraine on Bankruptcy Procedures (“Bankruptcy Code”) entered into force on 21 April 2019 and will apply from 21 October 2019. The Code enhances corporate bankruptcy procedures and introduces personal insolvency procedure.
Launch of bankruptcy proceedings revisited
Launch by a creditor
In contrast to the effective bankruptcy rules, the Bankruptcy Code does not provide for strict criteria to be met in order to launch bankruptcy proceedings (e.g., threshold amount of claims towards a debtor). Under the Bankruptcy Code, an initiating creditor should demonstrate that its claims towards a borrower are due.
Launch by a debtor
The debtor must apply for self-bankruptcy within one month from occurrence of the insolvency signs. If the debtor’s management fails to comply with this requirement, it may be jointly liable under the creditors’ claims.
Personal insolvency introduced
An individual may file for personal insolvency. Only the debtor may initiate personal insolvency. The personal insolvency procedure results in restructuring of the individual’s debts or declaring such individual bankrupt.
Other developments
The Bankruptcy Code introduces a number of other amendments, such as:
- Secured creditors may initiate bankruptcy proceedings, challenge the debtor’s transactions, and will get advisory voting rights at the creditors’ meetings
- An amicable settlement does not apply in bankruptcy proceedings. The parties to bankruptcy proceedings may agree on the terms of debt restructuring within the rehabilitation procedure
- The disposal of the debtor’s assets will be held at electronic trade platforms
Those creditors who managed to obtain enforcement writs after 21 July 2019 will be able to launch bankruptcy proceedings under the Bankruptcy Code despite non-compliance with three-months waiting period.
The Bankruptcy Code is expected to ensure efficient protection of creditors’ rights. The AVELLUM team is ready to guide you through all pitfalls of the bankruptcy procedure in Ukraine.
Additional notes
For further information on the topic please contact Vadim Medvedev, Partner, or by telephone +380 44 591-3355 or via e-mail.
CMS, Kyiv, Ukriane, 
