News (#12 December 2015)

UBA News

1st UBA Forum on Insolvency Law: Debt. Restructuring. Bankruptcy

On 18 November 2015 UBA held its inaugural 1st Forum on Insolvency Law: Debt. Restructuring. Bankruptcy. The latest changes in political activity and social life in Ukraine, updating legislation in the sphere of insolvency, increasing the frequency of occurrences of bankruptcies, in particular, banking sphere and other topical issues provoked a need for general discussion and furthered development of such unique platform as this event. Among the participants were: attorneys-at-law, judges, liquidators and representatives of banks, debtors and creditors, state bodies.

The Forum was unveiled with speeches by one of its initiators, Julian Khorunzhiy, partner of Ario Capital Group, a member of the UBA management board, Aleksandr Oleynik, director of department of issues of litigation and bankruptcy of the Ministry of Justice of Ukraine and Sergey Panov, deputy chairman of the board of UkrSibbank, a member of the council of the Independent Association of Banks of Ukraine (IABU). Mr. Khorunzhiy promulgated the results of survey on the liquidators profession and bankruptcy procedure. Mr. Oleynik highlighted the latest tendencies of draft work performed by the Ministry in the field of bankruptcy procedure. While Mr. Panov reported about the situation in the banking sphere and gave voice to the opinion of the banking community on bankruptcy proceedings.

Yuriy Moiseev, head of the division of bankruptcy issues at the Ministry of Justice, focused on the need to update legislation in the regulation of liquidators activity, including payment for expenses and improvement the procedure for property valuation.

Elena Ermolova, a member of the IABU Committee on creditors right protection, deputy head of division of work with problem assets, Bank Credit Dnepr, highlighted the rights of creditors in bankruptcy procedures. The speaker criticized the latest version of the On Recovery of Solvency of a Debtor or Recognition it as a Bankrupt Act of Ukraine, which deprives a committee of creditors of making all decisions regarding a debtors property, but substantially expands the powers of a liquidator. The speaker read proposital of the IABU regarding amendment of this Act. The most important is a proposition to return the right on sale of secured property back to creditors.

Within the framework of the first part of the event, the role of self-regulating professional organizations of liquidators, judicial practice on bankruptcy cases, including proceedings in the Supreme Court of Ukraine and the Supreme Economic Court of Ukraine, and control over the liquidators activities were discussed.

Aleksandr Biryukov, advisor at LCF Law Group, shared his experience of exploring international standards in the area of personal bankruptcy. Thus, in 2011 under the leadership of the World Bank, research of consumer bankruptcy models of 59 countries, aimed at developing standards in the sphere of bankruptcy of individuals, was carried out. The research covered comparative analysis of the existent systems of consumer bankruptcy. It was established that each country has its own unique system of bankruptcy of individuals that differs from the systems of neighboring countries. A report by the World Bank on bankruptcy of individuals that followed the research was approved in 2013. It was recommended to Ukraine that it develop a system of personal bankruptcy by enlisting experts from the World Bank and the International Monetary Fund. Then the speaker touched upon the peculiarities, aims, tasks and mechanisms, current conditions of consumer bankruptcies. One of the principal aims of consumer bankruptcies is avoidance of impoverishment.

Ukrainian MP Serhii Alieksieiev propounded the Draft Act of Ukraine On Restructuring of Debts of Natural Person or Recognition as a Bankrupt. The speaker dwelt at length on key provisions in the Draft.

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