Under this slogan, a moratorium on the opening of bankruptcy cases has been going on for over a year. The state has created artificial barriers to effectively combat malicious debtors.
I will remind that on October 18, 2018 in the second reading the Verkhovna Rada of Ukraine adopted the Bankruptcy Code of Ukraine. Having been signed by the President for a long time, it was put into effect only on October 21, 2019. And already in the summer, June 18, under the noble slogans of combating the consequences of COVID-19, the legislator made changes to prohibit the opening of bankruptcy proceedings against debtors – legal entities, according to creditors, if the debt arose from March 12, 2020. As a result, the country gained the most effective tool for business and immediately lost it.
Why is it so feared and who benefits from it?
The Code contains provisions on subsidiary and joint and several liability of the debtor’s managers, shareholders, participants and property owners. The Supreme Court has already begun to hear cases involving personal liability and to develop a fairly positive practice. Even the state, as the owner of enterprises, is afraid of understanding that debts will have to be held accountable.
The code opened access to bankruptcy and freed creditors from lengthy debt collection lawsuits. Bankruptcy proceedings have become a full-fledged tool for combating insolvency and recovering illegally withdrawn assets. Having lost the opportunity to use the instrument of bankruptcy, creditors lose the chance to repay debts, watching how their debtors withdraw their assets and re-register businesses in nominal terms.
In this way, the state kills businesses for the benefit of individuals who are trying to avoid liability for their debt obligations.