The basical role of the insolvency proceedings of the legal person is the gradual realization of the debtor’s assets and the payment of creditors’ liabilities. The bankruptcy proceeds in a manner that the bankruptcy trustee gradually realizes the assets of the debtor, from whom he pays the debtor’s debts in a apportionmently, until a) fully realizes all the assets of the debtor, or b) pays off all debts )
The purpose of bankruptcy is to satisfy the deptor ‘s creditors as much as possible, while creditors are satisfied in principle pro rata. Bankrupcy distribution means that each creditor is satisfied with the moneys in a ratio that corresponds to the amount of his claim to the sum of all creditors’ claims lodged. The satisfaction rate of one creditor therefore depends on the value of the moneys and on the total amount of all receivables of creditors in bankruptcy.
Bankruptcy of the Legal Entity or, respectively, Entrepneur – Simplified
1. The Propotion
Bankruptcy proceedings in the sphere of bankruptcy of legal entities and individuals begins with filing of application of the debtor or creditor who can independently give it. The creditor is obliged to provide to court information that he to be in identical situation with other creditors, and the debtor hasn’t fulfilled the obligation to creditors. Together with the statement it is necessary to pay 1 500 euros which represent payment for services of the preliminary trustee.
After 15 days the court considers requirements of creditors to the debtor and process of bankruptcy proceedings begins.
2. The Preliminary report
On the basis of the application of objections for requirements to the debtor, court will estimate property of the debtor and will establish the preliminary trustee. In case if the preliminary trustee manages to determine the cost of property of the debtor – the legal entity which will be higher than 6600 euros, the court will announce the procedure of bankruptcy. In case the cost of property is lower than 6600 euros, the court will cancel the decision about the introduction in a stage of bankruptcy proceedings because of a lack of property of the debtor.
3.a Cancellation of the company
The preliminary trustee in case if he doesn’t manage to determine the cost of property of the debtor, court will cancel the decision on the introduction in bankruptcy proceedings therefore the court according to the point 2 parts of paragraph 68 of the Commercial code will pass the decision on liquidation of legal entity and an exception of the Unified State Register of Legal Entities and individual entrepreneurs. Paragraph 68 of the Commercial code extends only to legal entities at whom the preliminary trustee has estimated necessary property on implementation of bankruptcy proceedings.
3.b Bankruptcy declaration
If the Trustee finds the property ratio at a specified amount, the court shall announce the bankruptcy. Upon bankruptcy, verifiers are entitled to pursue their bankruptcy claims, on the basis of which their receivables after the takeover will be fairly satisfied. Without a claim, it is not possible to satisfy the claim that arose before the bankruptcy statement. Upon registration, ask for a meeting of creditors, on the basis of which the creditors have the permission of their representatives (the creditors ‘committee or the creditors’ representative).
Based on the decision of the creditors’ representatives, the trustee proceeds gradually to change the debtor’s assets. After the monetization, the creditor will pay a pro rata payment (schedule). The whole process is under the strict supervision of the court, which decides on the final statement of proceeds from the transfer of the debtor’s assets.
4. Realization of property of the debtor
In case the objectives of bankruptcy proceedings – realization of property of the debtor are achieved, the court will stop bankruptcy proceedings and according to the Commercial code will pass the decision on liquidation of legal entity and a further exception of the Unified State Register of Legal Entities and individual entrepreneurs.