Insolvency proceedings advising
Prindi
Saada edasiIf company suffer losses to the extent that it cannot carry onits activity, insolvency proceedings are initiated.
Reasons why companies should use insolvency proceedings advising:
- Comapny is losing market position and has solvency problems, clients are displeased
- Comapny works with loss and management can not offer any new ideas how to cope with this situation
- Comapny is losing market advantage and is not capable of dealing with new enviroment changes.
Reorganisation proceedings should contribute to the reduction of the number of companies liquidated as a result of financial difficulties and enable them to continue business. This, in turn, will allow the claims of creditors to be satisfied to a greater extent and jobs to be preserved.
Reorganisation proceedings can be commenced once the petition for reorganisation of the company in question is submitted. If it seems reasonable that reorganisation would enable the company to come out of the red, the court will commence reorganisation proceedings in response to the petition and designate a reorganisation adviser whose main task is to advise the owner of the company and supervise the owner's actions. The court will also determine a deadline by which the reorganisation plan must be submitted to the court for approval.
A reorganisation plan provides for the measures to be taken in order to resolve the solvency problems and the term within which the claims of creditors will be satisfied. The court can approve the reorganisation plan adopted (or not adopted) by creditors’ vote. A reorganisation plan not adopted by creditors’ vote will be subjected to an economic analysis. An approved reorganisation plan will only apply to the creditors whose claims are reorganised under the plan and who have been notified of the opportunity to participate in the adoption of the reorganisation plan.
A reorganisation plan approved by court is binding upon the debtor. The reorganisation proceedings are concluded once the reorganisation plan has been appropriately complied with.