Bankruptcy in Lithuania – the state of an insolvent enterprise where bankruptcy proceedings have been initiated in court or the creditors are performing extrajudicial bankruptcy procedures in the enterprise. Bankruptcy proceedings means a civil case opened in court over disputes arising from legal relations connected with bankruptcy.
Bankruptcy proceedings shall be instituted if the court establishes the presence of at least one of the following conditions:
- the enterprise is insolvent;
- the enterprise has made a public announcement or in any other manner notified the creditor/creditors of its inability to effect settlement with the creditor/creditors and/or of its lack of intent to discharge its liabilities.
Insolvency of an enterprise means the state of an enterprise when it fails to settle with the creditor/creditors after the lapse of three month from the deadline prescribed by laws, other legal acts as well as by the agreements between a creditor and the enterprise for the discharge of the obligations of the enterprise, or upon expiry of the said time period after the creditor/creditors demands/demand the discharge of the obligations where the deadline has not been set in the agreement, and the overdue obligations/debts are in excess of over a half of the value of the assets on the enterprise’s balance.
The following persons shall have the right to file a petition for the initiation of the enterprise bankruptcy proceedings:
- the creditor/creditors;
- the owner/owners;
- the head of the enterprise administration;
- liquidator of the enterprise in liquidation.
Persons specified may file a petition for bankruptcy with the court if at least one of the following conditions is present:
- the enterprise fails to pay wages and other employment-related amounts when due;
- the enterprise fails to pay, when due, for the goods received, work performed/ services provided, defaults in the repayment of credits and does not fulfil other obligations assumed under contracts;
- the enterprise fails to pay, when due, taxes, other compulsory contributions prescribed by law and/or the awarded sums;
- the enterprise has made a public announcement or notified the creditor /creditors in any other manner of its inability or lack of intent to discharge its obligations;
- the enterprise has no assets or income from which debts could be recovered and therefor the bailiff has returned the writs of execution to the creditor.