Concept and Objectives of the Corporate Restructuring Process
The corporate restructuring process refers to the implementation of technical, economic, and organizational measures aimed at restoring the company’s solvency. This includes changing the type of business activity, modernizing production, improving work organization, selling assets or parts of them, acquiring assets of other companies through mergers or splits, and modifying the amount and deadlines for fulfilling obligations to creditors.
The restructuring process may be initiated if:
- The company has failed to settle its obligations to a creditor (or creditors) for more than three months past the deadline set by law, other legal acts, or the agreements between the company and the creditor, or after the same period from the creditor’s written demand, if no deadline was set in the agreement;
- The company has not ceased its commercial operations;
- No bankruptcy case has been filed against the company and no extrajudicial bankruptcy procedure has been initiated.
A petition to initiate a restructuring case is submitted by the head of the company.
A petition, to the regional court of the location where the company is registered, must be in writing and accompanied by:
- A resolution of the first creditors’ meeting, a list of the company’s creditors compiled from company documents, indicating the amounts of obligations, due dates, and forms of security, temporary protective measures, and urgent contact details of key creditors;
- A proposal for the company’s administrator and a copy of a certificate confirming their right to provide administrative services;
- Documents proving that the company meets the conditions required to initiate the restructuring process;
- A resolution of the company’s shareholders meeting, or in the case of state or municipal companies – a decision of the institution exercising ownership rights and obligations, to restructure the company;
- A draft of the restructuring plan approved by the main creditors or the first creditors’ meeting;
- A list of civil cases involving monetary claims against the company and claims filed by the company against others;
- The balance sheet of the last reporting period, an asset inventory report, and other relevant documents necessary to initiate the restructuring proceedings.