Julian Khorunzhyi, Partner of Ario Law Firm:
– In any cases, Draft Law No. 3132-d does not remove the problems, which were discussed. Today, Article 6 of the Law “On Restoring a Debtor’s Solvency or Declaring Him a Bankrupt” is written on two pages, while the same Article is written on four pages in the Draft. This new version only complicates the procedure of approval of the sanation plan, but it does not solve any problems.
What is necessary to do? First of all, the Supreme Economic Court is not the body that has the power to issue regulations. This norm must be excluded. Secondly, I would clearly prescribe when a judge might refuse to approve a pre-trial sanation plan.
Why is a sanation procedure (both legal and pre-trial) less advantageous than liquidation proceeding? In the course of liquidation, property may cost, for example, UAH 100 million. During a sanation, a debtor will pay the additional VAT 20% of 100 million. Thus, a creditor will get 80 million. What is more profitable to a creditor? Therefore, mechanisms prescribed in the law “On Financial Restructuring” are extremely important. In fact, they can start a sanation where it is possible.
The courtesy photo is here.