The initiative of introduction of the financial restructuring of the company can come from either the debtor or a third person (third parties). In the first case, the law clearly requires that supreme governing body (depending on the legal form it may be a general shareholders’ general meeting of members, etc.) or the owner of the debtor’s property – a unitary enterprise can do it. Third parties may intervene in the bankruptcy process only with the consent of the debtor. Unlike the situation with the debtor, where the will of the latter is formed, and expresses its participants (founders), the issue of consent for the case of a third party on behalf of the debtor’s power to decide the head, the consent of the meeting participants (founders) or property owner is not needed.
In both cases, the initiative is made in the form of treatment to the first meeting of creditors. Mandatory part of treatment in favor of the proposed enforcement of the debtor of his obligations, a financial recovery plan, debt repayment schedule.
On general rule, financial improvement introduced by the arbitral tribunal, if the need for its introduction of the creditor’s consent. However, the law knows the two cases are exceptions to this rule.
In first one, financial recovery can be entered by the court, when the creditors’ meeting has not taken any decision on further following the supervision of the bankruptcy procedure. The condition in this case is that the initiators of improvement continues to support their own initiative and provided the necessary support. Secondly, even if creditors seek external administration or the opening of bankruptcy proceedings, then in this case financial recovery may be imposed against their will. The condition in this part – do not provide any valid support, but it is strictly defined forms – the banking guarantees, exceeding the total amount of debt to all known creditors at least 20%.
The only one thing that remains to be noted – financial recovery procedure can be put in situations where the enforcement of creditors’ claims by the debtor is not represented in principle, but a meeting of creditors agreed to such an option.
Management of the debtor in the period of financial recovery.
During the financial restructuring government debtor while preserving its role, because this is the one of the fundamental principles of procedure under consideration, but still exercise their powers with some restrictions. They are as follows.
First, the debtor may not, without the consent of the meeting of creditors or the creditors’ committee make a transaction in which he has an interest or which:
a) associated with the acquisition, disposal or possible disposal of its property, the book value of more than 5% of book value of assets of the debtor ;
b) entail the issuance of loans (credits), the issuance of guarantees and warranties, as well as the establishment of trust management of property the debtor.
Second, the debtor may not, without the consent of the meeting of creditors or the creditors’ committee and the person or persons providing security, to make a decision on its reorganization (merger, accession, division, separation, transformation).
Third, if the amount of money the debtor’s obligations arising after the introduction of financial restructuring is over 20% of the amount of creditors ‘claims included in the register of creditors’ claims, all transactions entailing the creation of new obligations of the debtor may occur only with the consent of the meeting creditors (creditors’ committee).
Almost all of us remember the times when it was possible to buy something even if one hadn’t got enough funds. Loan was a simple way out. It is not surprising that today many of those who applied for a credit, are looking around for how to avoid bankruptcy.
Those people who happened to get into the condition when their expenses exceed their earnings, definitely have to search for ways to avoid bankruptcy.
Being in such condition it is wise to use any ways to get over it. Avail yourself of such great chance as the online technologies. Using them at full capacity can give great results. Working with search engines, forums, social networks,web sites one will discover a number of tips to avoid bankruptcy and a great deal of other important info. Also subscribing to RSS on this blog will assist to be aware of new publications and tips on the topic.
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