NOTbankrupt. Or how to overcome the PostSOVID crisis and save the business.

Tishchenko Nataliya

Arbitration manager,

managing partner of

Nobili Law Firm


NOTbankrupt. Or how to overcome the PostSOVID crisis and save the business.


As if in a big snowball, the Post-Soviet crisis is covering companies with debt en masse. Failure to calculate one large enterprise leads to overdue monetary obligations of a dozen smaller ones. And so to small business. If closing a nice bakery on the corner of two central streets of the city does not require large costs from the owner, the medium and large – having in the arsenal of debts, assets and reputation, to the last try to fight for their place under the sun. The whole civilized world is trying to use alternative ways to settle the issue of debt restructuring.

“Creditors are different: some are militant to “knock out” debts, others are understanding of the situation. But they all have the only desire – to return their money. And the way out is a very popular process lately. This is pre-trial reorganization under Article 5 of the Bankruptcy Procedure Code of Ukraine.”


What is the power in?!

Reduction of reputational risks. They should not be underestimated. Imagine that a large well-known company with international counterparties appears in the media with a diagnosis of bankruptcy. Most often, it is doomed to liquidation. Pre-trial reorganization is not yet bankruptcy. It is this procedure that provides certain guarantees for the debtor and creditors, without opening a bankruptcy case.
Pre-trial reorganization – an opportunity to get a credit vacation to repay debts to creditors. Calculations will be based on a clearly established sequence and amount determined by the remediation plan. Creditors cannot “tear” the company. Debts will not be subject to penalties. While the pre-trial rehabilitation is underway, it is not possible to open a bankruptcy case. The debtor remains in control of the enterprise. Opportunity to optimize the tax burden by writing off 3-year tax debts and installments.


How does it work ?!

The most difficult thing at the beginning of the pre-trial procedure is to gather all the creditors and make sure that the debtor has written the most realistic rehabilitation plan and intends to fulfill it. To do this, the debtor convenes a meeting of creditors by written notice and places a notice on the official web portal of the judiciary of Ukraine. The rehabilitation plan must be approved by more than 50% of the total amount of unsecured claims for each category of debt by unsecured creditors. The commercial court then approves the reorganization plan, which is binding on all creditors whose claims are included in the reorganization plan. The absence of the creditor at the meeting or his signature on the relevant protocols approving the reorganization plan, the requirements of which are included, is not a ground for appeal. Both the debtor and the reorganization manager can manage the process of pre-trial reorganization and control it. Involving an arbitration trustee to conduct pre-trial reorganization is a strong argument for obtaining the consent of most creditors, and for the debtor – a guarantee of compliance with the law and prevent errors in the procedure, and as a consequence, exclude the possibility of lengthy litigation to appeal decisions. Using the experience of a crisis manager to achieve long-term goals to restore solvency.

Taken from the original article on LegalHub: