Bishkek City October 15, 1997, # 74
THE LAW OF THE KYRGYZ REPUBLIC
On Bankruptcy (insolvency)
(Amended by Laws of the Kyrgyz Republic:
# 160, passed December 30, 1998;
# 64, passed July 7, 1999;
# 79, passed September 29, 2000)
Article 1. Issues Regulated By This Law
Article 2. Terminology Applied In This Law
Article 3. Bankruptcy (insolvency)
Article 4. Process Of Bankruptcy
Article 5. Basic provisions of the procedure of special administration
Article 6. Basic Provisions Of The Sanation Procedure
Article 7. Basic Provisions Of The Rehabilitation Procedure
Article 7-1. Basic Provisions Of The Procedure Of Amicable Settlement
Article 9-1. Size Of Debt: Required For The Limitation Of The Process Of Bankruptcy Of A Debtor
Article 9-2. Mandatory Initiation Of The Process Of Bankruptcy By A Debtor
Article 11. Contents Of Creditors' Claims
Article 12. Creditors' Meeting
Article 13. Making Decisions At The Creditors' Meeting
Article 14. Creditors' Committee
Article 15. Expression Of No Confidence In Respect To The Administrator
Article 16. Liquidation Of A Solvent Legal Entity
Article 17. State Body In Charge Of Cases Of Bankruptcy
Article 18. Wrongful Acts During The Process Of Bankruptcy
Article 19. Fictitious And Predetermined Bankruptcy
Article 20 Invalidity Of Decision
Article 22. Consequences Of Recognition (Pronouncement) Of A Debtor As Bankrupt
Article 24. Recognition Of A Debtor Insolvent
Article 25. Safekeeping Documents After Completion Of The Process Of Bankruptcy
Article 26. Resuming The Process Of Bankruptcy
CHAPTER 1-1 CONSIDERATION OF CASES OF BANKRUPTCY IN THE COURT
Article 27. Consideration Of Cases By The Court
Article 27-2. The Right To Appeal To The Court
Article 27-3. Parties To A Bankruptcy Case
Article 27-4. Parties To An Arbitration Case
Article 27-5. Grounds For Starting The Case
Article 27-6. Petition By A Debtor
Article 27-7. Documents To Be Attached To A Petition By A Debtor
Article 27-8. Petition By Creditor
Article 27-9. Joint Claims Of Creditors
Article 27-10. Documents To Be Attached To A Petition By A Creditor
Article 27-11. Acceptance Of A Petition For Recognition Of The Debtor Bankrupt
Article 27-12. Rejection Of A Petition For Recognition Of A Debtor Bankrupt
Article 27-13. Returning The Petition For Recognition Of The Debtor As Bankrupt
Article 27-14. Measures To Secure The Claims Of Creditors
Article 27-15. Opinion Of The Debtor Concerning The Petition To Recognize The Debtor Bankrupt
Article 27-16. Time Frame For Consideration Of The Bankruptcy Case
Article 27-17. Issues Considered By The Court Prior To Making A Decision
Article 27-18. Grounds For Recognition Of The Debtor Bankrupt
Article 27-19. Opinion Of The Court
Article 27-20. Decision Of The Court
Article 27-21. Court's Decision Of Finding Debtor Bankrupt And Setting A Bankruptcy Process
Article 27-22. Publication Of The Decision On Recognition Of The Debtor Bankrupt
Article 27-23. Decision Of The Court On Denial Of Recognition Of The Debtor Bankrupt
Article 27-24. Court's Decision Of Ending Bankruptcy Process Of Debtor
Article 27-25. Suspending Proceedings In Bankruptcy Process
Article 27-27. Postponing the case consideration.
Article 27-28. Grounds For Not Considering The Petition
Article 27-29. Grounds For Termination Of The Proceedings In The Case Of Bankruptcy
Article 27-31. Consideration Of Petitions And Complaints
Article 27-32. Proceedings In The Appellate Instance
Article 27-33. Consideration Of The Case By The Supervising Instance
CHAPTER 2 SPECIAL ADMINISTRATION
Article 27-34. Initiation Of The Procedure Of The Special Administration
2. SPECIAL ADMINISTRATION WITHOUT COURT INVOLVEMENT
Article 28. Initiation Of A Process Of Special Administration Without Court Involvement
Article 29. Conditions Of Proceeding Special Administration Without Court Involvement
Article 30. Decisions Of Creditors' Meeting
Article 30-1. Consequences Of Absence Of Creditors At The Creditors' Meeting Organized By Debtor
Article 31. Effect Of Appointment Of The Special Administrator
Article 51. General Provisions
Article 52. Time Frame Of The Liquidation
Article 53. Authority Of The Special Administrator In Liquidation Of Debtor
Article 54. Creditors' Accounts
Article 55. Debtor Restructuring
6. COMPLETION OF THE PROCEDURE OF THE SPECIAL ADMINISTRATION
Article 55-1. Completion Of Procedure Of Special Administration
CHAPTER 3 TEMPORARY ADMINISTRATOR
Article 61. Role Of Temporary Administrator
Article 62. Appointment Of Temporary Administrator
Article 63. Rights And Duties Of The Temporary Administrator
Article 64. Cessation Of Powers Of A Temporary Administrator
CHAPTER 4 SPECIAL ADMINISTRATOR
Article 65. General Provisions
Article 66. Rights Of A Special Administrator
Article 67. Invalidity Of Transactions Made By Debtor
Article 70. Obligations Of The Special Administrator
Article 71. Obligations Of The Special Administrator In Case Of Insufficiency Of Assets
Article 72. Liability Of The Special Administrator (Temporary Administrator)
Article 73-1. Remuneration For A Special Administrator
Article 73-2. Report Of A Special Administrator
CHAPTER 5 SPECIAL ADMINISTRATOR AND SECURED CREDITORS
Article 74. Rights And Obligations Of A Secured Creditor
Article 75. Holding Collateral Ineffective.
Article 77. Transfer Of The Right To Collect Collateralized Property
CHAPTER 6 PRINCIPLES OF LIABILITY IN THE BANKRUPTCY PROCESS
Article 78. Full Liability Of A Legal Entity
Article 79. Full And Extended Liability Of Stake Holders Of The Debtor
Article 80. Limited Liability Of Stake Holders Of The Debtor
Article 81. Liability Of A Guarantor
Article 82. Full Liability Of An Individual Entrepreneur
Article 83. Liability Of Managers Of A Troubled Debtor
CHAPTER 7 CONDITIONS AND PRIORITY OF DEBT REPAYMENT
Article 85. General Rules On Observation Of Priorities In Repayment Of Debts
Article 86. Property Not Included Into The Pool Of Liquidation Assets
Article 87. Payment Priorities
Article 88. Mutual Settlements
Article 89. Interests And Penalty
Article 90. Collection Of Under-Received Profit
Article 91. Consideration And Enforcement Of Creditors' Claims
Article 93. Concept Of Sanation
Article 94. Application For Sanation
Article 95. Surety And Guarantee Of Third Parties
Article 97. Procedure For Conducting Sanation
Article 98. General Provisions
Article 99. Rehabilitation And Special Administration
Article 100. Initiation Of The Rehabilitation Process And Role Of The Creditors' Meeting
Article 101. Conditions For Conducting Rehabilitation
Article 102. Decisions Of The Creditors' Meeting
Article 102-1. Approval Of The Plan Of Rehabilitation By The Court
Article 102-2. Rejection Of The Plan Of Rehabilitation By The Court
Article 104. Rehabilitation Plan
Article 105. General Provisions
Article 106. Format Of The Amicable Agreement
Article 107. Contents Of The Amicable Agreement
Article 108. Procedure For Entering Into The Amicable Agreement
Article 110. Conditions For Approval Of The Amicable Agreement By The Court
Article 111. Consequences Of Approval Of The Amicable Agreement By The Court
Article 112. Rejection Of An Amicable Agreement
Article 113. Invalidity Of The Amicable Agreement
Article 114. Consequences Of Invalidation Of The Amicable Agreement
Article 115. Consequences Of Failure To Perform Or Of Improper Performance Of Amicable Agreement
CHAPTER 11 PECULIARITIES OF BANKRUPTCY OF BANKS
Article 116. Rehabilitation Of A Bank
Article 117. Conservation Of A Bank
Article 118. Powers Of The Conservator
Article 119. Special Administration Of A Bank
Article 120. Particular Features Of The Special Administration Of A Bank
Article 121. Sanation Of Banks
CHAPTER 12 BANKRUPTCY OF AN INDIVIDUAL ENTREPRENEUR
Article 122. Particular Features Of The Special Administration Of An Individual Entrepreneur
CHAPTER 13 BANKRUPTCY OF INDIVIDUALS ENGAGED IN THE AGRICULTURE
Article 123. Bankruptcy Of Individuals Engaged In The Agriculture
Article 124. Legal Framework For A Process Of Bankruptcy Of Individuals Engaged In The Agriculture
CHAPTER 14 BANKRUPTCY OF A MISSING DEBTOR
Article 125. Peculiarities Of Submission Of A Petition For Recognizing A Missing Debtor Bankrupt
Article 126. Consideration Of Case Of Bankruptcy Of A Missing Debtor
Article 127. S atisfying Claims Of Creditors Of A Missing Debtor
Article 128. Application Of Provisions On Bankruptcy Of Missing Debtor
CHAPTER 15 BANKRUPTCY OF INSURANCE COMPANIES
Article 129. General Provisions
Article 130. Consideration Of Cases Of Bankruptcy Of Insurance Companies In The Court
Article 131. Special Administration Of An Insurance Company Without Involvement Of The Court
Article 132. Satisfaction Of Claims Of Creditors
CHAPTER 16 BANKRUPTCY OF PROFESSIONAL AGENTS OF THE MARKET OF SECURITIES
Article 133. General Provisions
Article 136. Satisfaction Of Claims Of Creditors.
CHAPTER 17 BANKRUPTCY OF PUBLIC FOUNDATIONS
Article 137. Regulating Cases Of Bankruptcy Of Public Foundations
CHAPTER 18 BANKRUPTCY OF CONSUMERS' COOPERATIVES
Article 138. Regulating Cases Of Bankruptcy Of Consumers' Cooperatives
Article 1. Issues Regulated By This Law
1. This Law shall establish the grounds for recognition (pronouncement) of an insolvent debtor as bankrupt (insolvent) and regulate the order and conditions for implementation of procedures applied within the process of insolvency: special administration, sanation, rehabilitation, amicable settlement, conservation and other issues arising from the inability of the debtor to satisfy fully the creditors' claims.
2. This Law shall apply in respect of the following:
a. legal entities under any kind of ownership, established as commercial organizations (except state owned enterprises established on the grounds of operational management), including foreign legal entities and legal entities with foreign involvement, registered in the Kyrgyz Republic in accordance with the procedure established by the legislation, as well as banks and other financial lending organizations;
b. legal entities under any ownership which are not for profit organizations in cases directly stipulated by this Law or other normative legal acts of the Kyrgyz Republic regulating issues of the establishment and organizational and legal format of mentioned not for profit organizations;
c. individual entrepreneurs.
3. This Law shall not apply in respect of:
a. public and other institutions;
b. cases of liquidation of solvent legal entities upon the grounds stipulated by the paragraph 2 of the article 96 of the Civil Code of the Kyrgyz Republic , provided requirements set in the Article 16 of this Law have been met.
4. Rules required for the explanation and enforcement of this Law shall be established by other normative legal acts passed by the Government of the Kyrgyz Republic as well as the National bank of the Kyrgyz Republic in respect to banks and other financial and lending organizations in accordance with this Law.
5. Provisions regulating the bankruptcy (insolvency) of a debtor, contained in other laws may be applied only after respective amendments have been made into this law.
6. In case an international agreement of the Kyrgyz Republic sets other rules than those established by this Law, the rules of an international agreement shall apply.
7. Judgments made by courts of foreign states in respect to cases of bankruptcy (insolvency) shall be recognized in the territory of the Kyrgyz Republic in accordance with international agreements of the Kyrgyz Republic .
8. In absence of an international agreement of the Kyrgyz Republic , judgments made by courts of foreign states in respect to cases of bankruptcy shall be recognized in the territory of the Kyrgyz Republic unless such decisions contradict to the legislation of the Kyrgyz Republic .
Article 2. Terminology Applied In This LawFor purposes of this Law, the following terminology shall be applied:
Administrator - a qualified specialist appointed by the court, the National Bank of the Kyrgyz Republic or a creditors' meeting, who may act as a Temporary Administrator, Special Administrator, Conservator, External Manager, and who is responsible for conducting the process of insolvency of a debtor.
Assets - the property comprised of fixed assets, other long term investments (including nonmaterial assets), current assets, financial assets and accounts receivable.
Affiliate of a legal entity or a physical entity - any legal entity or a person (except public bodies supervising activities of a legal entity or an individual person within the limits of their competence (jurisdiction) that has the right to directly or indirectly determine or influence decisions made by this person, including through a contract (or an oral agreement) or any other agreement, as well as any individual person or a legal entity in respect to which the affiliate has the same right. Executive officers and shareholders of a legal entity or any enterprise that owns 10% and more of voting shares of a legal entity (5 % and over in case of open end joint stock companies) shall also be recognized as affiliates of such a legal entity.
Bankruptcy of an individual entrepreneur - a method of the procedure of the special administration which is conducted only through the involvement of the court and provides for the exaction and alienation of assets of a debtor included into the liquidation assets' pool in order to satisfy the claims of creditors.
External Manager - an administrator appointed by the court or by a meeting of creditors, who is responsible for implementing the procedure of rehabilitation of the debtor in accordance with an accepted rehabilitation plan.
Initiation of the process (procedure) of bankruptcy - set of measures, stipulated by this Law (for instance, filing a suit to the court for recognition of a debtor as bankrupt) that may result in the commencement of the procedure (process) of bankruptcy.
Temporary Administrator - an administrator appointed by court or the National Bank of the Kyrgyz Republic upon the petition filed by a petitioner who is responsible for preserving the assets of a debtor pending the final decision to be made by the court or the meeting of creditors (in case of the process of bankruptcy without the court involvement).
Debtor - a legal entity or an individual entrepreneur considered or recognized as insolvent.
Extended Liability - the principle applied to stakeholders of the debtor (in case of a legal entity) in under which the stakeholders and share holders of a legal entity are liable for the obligations of the debtor equally for all stakeholders in the same proportion to the value of their contributions made into the legal entity to be determined by founding documents of the legal entity.
Costs of the bankruptcy process - necessary costs, associated with carrying out the process of bankruptcy including the cost of publication of notices on the bankruptcy procedure, court fees, expenses made by the administrator and remuneration for the administrator, as well as expenses of the debtor relating to the period of time within which the administrator has considered it necessary to continue the economic activity of the debtor, and other expenses.
Petition for recognition of a debtor as bankrupt (insolvent) - a request to initiate a process of bankruptcy in the court in respect to a debtor, consisting of a lawsuit by a creditor (group of creditors), the debtor, the National Bank of the Kyrgyz Republic, and other persons indicated in this Law filed to the court in accordance with the procedure set by this Law.
Individual entrepreneur - any person carrying out entrepreneurial activities without establishing a legal entity in compliance with the civil legislation of the Kyrgyz Republic, who may be deemed insolvent in compliance with this Law and who may be subject to the process of bankruptcy.
Conservator - a qualified specialist appointed by the National Bank of the Kyrgyz Republic, For the conservation of a bank as well as for the initiation of the procedure of the special administration or rehabilitation of the bank.
Conservation - a procedure applied to an insolvent bank by decision of the National Bank of the Kyrgyz Republic in order to recover the solvency of the bank.
Creditors' committee - an authorized body established by the meeting of creditors to carry out its activities in compliance with the requirements of this Law.
Creditor - a person, including the domestic or foreign legal entities and individuals, as well as the Kyrgyz Republic represented by authorized bodies, that has the right to claim that the debtor should fulfill its obligations - transfer property, perform works, pay the money, etc.
Liquidation - a method of the procedure of special administration which involves the exaction and alienation of all assets of a debtor (in case of a legal entity) included into the pool of liquidation assets in order to satisfy claims of creditors in the order of priority.
Pool of liquidation assets - assets that belong to a debtor less the assets pointed out in this Law (collateralized assets, withdrawn from the turnover, assets of an individual entrepreneur that may not be subject to lien, etc.).
Amicable settlement - a procedure applied within the process of bankruptcy aiming at reaching an agreement between the debtor and creditors concerning the execution of obligations of the debtor, to be binding upon other creditors after approval by the court.
Commencement of a procedure of bankruptcy - the moment of making a decision by the court, meeting of creditors, National Bank of the Kyrgyz Republic on recognition of the debtor as bankrupt and on initiation of the procedure of the special administration through the appointment of a special administrator.
Mandatory payments - taxes, charges, and other obligatory contributions into the budget of the respective level, and into extra-budgetary funds, pursuant to the procedure and conditions determined by the legislation of the Kyrgyz Republic.
Limited liability - the principle applied to stakeholders of a debtor (in case of a legal entity) under which the stakeholders of the debtor are not liable for the obligations of the debtor and bear the risk of losses associated with the activities of the debtor to the extent of their contributions (shares).
Liabilities - obligations of a debtor (with the exception of sub ventions, subsidies, own funds and other sources) consisting of borrowed and attracted funds, including the accounts payable.
Full liability - the principle applied to shareholders and stakeholders of a debtor (in case of a legal entity) under which the stakeholders of a debtor are liable for the obligations of the debtor to the extent of all the property they own in solidarity, in accordance with the founding documents or the legislation of the Kyrgyz Republic.
Enterprise - set of property as implied by the concept provided in the Article 33 of the Civil Code of the Kyrgyz Republic .
Process of bankruptcy - a process applied to the debtor, through the procedures stipulated by this Law.
Rehabilitation - a procedure, applied within the bankruptcy process in order to recover the solvent status of the debtor. Procedure of rehabilitation in respect to a debtor which is a legal entity may or may not involve the court and must always involve the court in case of a debtor which is an individual entrepreneur.
Restructuring - a method of the procedure of special administration which involves creation of one or more new legal entities based on the assets of the debtor for further sale in the interests of creditors and subsequent liquidation of a legal entity which is the debtor.
Manager - a person appointed in compliance with the established procedure to manage a legal entity (director, member of the board, manager, executive, etc., or a deputy or an acting manager).
Sanation - a procedure, applied within the bankruptcy process, which involves economic recovery of the debtor, by employing financial, economic or organizational measures. Sanation implies satisfaction of claims of all creditors within the period established by this Law.
Special administration - a procedure of bankruptcy process, applied to a debtor. Procedure of the special administration in respect to a debtor which is a legal entity may or may not involve the court, and must always involve the court in respect to a debtor which is an individual entrepreneur. Methods of the special administration include the liquidation or restructuring a legal entity and bankruptcy of an individual entrepreneur. It involves the appointment of special administrator, the sale or alienation of the debtor's assets to third parties for the benefit of creditors and a termination of the legal entity and business activity of the individual entrepreneur.
Special administrator (liquidator) - an administrator appointed by the court or the National Bank of the Kyrgyz Republic, or by a meeting of creditors, who is responsible for implementing the special administration of the debtor.
Stakeholder of a legal entity - an individual or a legal entity (including the Kyrgyz Republic, represented by the State Property Fund of the Kyrgyz Republic in respect to state owned Enterprises and legal entities with the share of the state ownership; founders, share holders, members and partners, etc.) that have claims in respect to the debtor, or the lien over the debtor' property or other rights in respect to property of the debtor.
Legal entity - any organization which has characteristics as described in the Article 83 of the Civil Code which may be recognized (pronounced) as insolvent and may be subject to the process of bankruptcy.
Article 3. Bankruptcy (insolvency)Bankruptcy (insolvency) shall be understood as the insolvency of a debtor which has been recognized by the court or declared by a meeting of creditors, i.e. the lack of ability of the debtor to fully satisfy claims of the creditors in respect to monetary obligations, including the lack of ability to make mandatory payments in favor of the budget and extra-budgetary funds.
Article 4. Process Of Bankruptcy1. The process of bankruptcy shall be understood as the activity of the state, represented by authorized bodies, courts, administrators who have been specially appointed in compliance with the procedure established by law (temporary administrators, special administrators, conservators, external managers), as well as creditors and the National Bank of the Kyrgyz Republic, regulated by this Law and aiming at satisfying claims of the creditors, as well as the restoration of debtor's solvency, or the termination of activities of the debtor.
2. The process of bankruptcy shall serve as the way to satisfy the claims of creditors in respect to an insolvent debtor.
3. Procedure of the special administration, conducted through the liquidation or restructuring a debtor, in case of a legal entity, or through the bankruptcy of an individual entrepreneur, may be applied upon commencement of the process of bankruptcy or within the process of bankruptcy.
4. Upon initiation of the process of bankruptcy or within the process of bankruptcy the following procedures may be applied:
a. sanation;
b. rehabilitation;
c. amicable settlement;
d. conservation, in respect to banks.
Article 5. Basic provisions of the procedure of special administration1.. Liquidation shall:
- apply in respect to a legal entity;
- involve the exaction, alienation and subsequent distribution of assets of the debtor, included into the pool of liquidation assets, in favor of the creditors;
- upon completion of the liquidation process, the activity of the debtor shall be terminated and the record in the state register of legal entities shall be canceled.
2. Bankruptcy of an individual entrepreneur shall:
- apply in respect to a physical entity, registered as an individual entrepreneur;
- be conducted only through the involvement of the court;
- involve the exaction and alienation and subsequent distribution of assets within the pool of liquidation assets in favor of the creditors of the debtor;
- the court may disqualify an individual entrepreneur, i.e. disallow the entrepreneur to conduct any business activity within a period of time, set by this Law.
3. Restructuring shall:
- apply to legal entities;
- imply the replacement of stakeholders (stakeholder) of an entity and establishment of one new or several new legal entities;
- new legal entity, or several legal entities, and the remaining assets of the debtor shall be sold (alienated) to satisfy the claims of creditors;
- activity of the legal entity shall be terminated upon completion of the restructuring procedure.
Sanation shall:
1. apply to legal entities;
2. imply existence of guarantees to protect interests of creditors, and full satisfaction of their claims within the period established by this Law;
3. allow the debtor to continue its economic activity if sanation is successful and the debtor has restored the solvency status;
4. not imply the replacement of stakeholders, unless otherwise provided by the agreement of parties.
Article 7. Basic Provisions Of The Rehabilitation ProcedureRehabilitation:
1. shall apply both to a legal entity and an individual entrepreneur;
2. shall require the involvement of the court in cases of rehabilitation of an individual entrepreneur;
3. shall involve the submission of a rehabilitation plan by the debtor for acceptance by the creditors in accordance with the requirements of this Law;
4. rehabilitation plan shall allow the debtor to continue business activity to satisfy the creditor's claims in full or in part;
5. may turn into the process of the special administration of the debtor in compliance with the requirements of this Law;
6. shall not involve the change of stakeholders, unless otherwise provided by the agreement between the parties.
Article 7-1. Basic Provisions Of The Procedure Of Amicable SettlementAmicable settlement shall:
1. apply within the process of bankruptcy both in respect to a legal entity or an individual entrepreneur, through the involvement of the court;
2. imply reaching an agreement between the debtor and the creditors, under which the creditors agree that all or some claims shall be satisfied on the grounds of an agreement, without appointment of an administrator by the court;
3. not imply the replacement of stakeholders, unless otherwise stipulate by the agreement between parties involved.
Article 8. Administrator1. Procedures within the process of the bankruptcy shall be conducted by an administrator as a qualified expert. An administrator may act as:
• Temporary administrator;
• Special administrator;
• External manager;
• Conservator (in case of banks).
2. Administrator may be an individual including a foreigner who meets the requirements established by the legislation of the Kyrgyz Republic in respect to the physical and legal capabilities of such persons, as well as the requirements specified below in the paragraph 3 of this Article.
3. An administrator must possess a license to perform the activities of an administrator except when administrator is an employee of the public body for bankruptcy cases or the National Bank of the Kyrgyz Republic. The following may not be appointed as administrators:
• a creditor, a debtor, a party to a transaction, an stakeholder, or the manager of an insolvent debtor;
• a person who used to be a stakeholder, a stake holder or the manager of the debtor at least a year prior to the initiation of the process of bankruptcy;
• a close relative of the persons, listed above;
• any person employed in the bodies of the public administration or the governance (except the staff of the state body for bankruptcy cases and the National Bank of the Kyrgyz Republic), the local self government and judiciary of the Kyrgyz Republic:
• an official of the state body of cases of bankruptcy - in respect to the cases of bankruptcy at an enterprise owned by the state, partially or fully;
• any person whose activity associated with the management of affairs and/or property of other persons is subject to restrictions;
• any person who has been convicted by the court;
• any person who used to be an individual entrepreneur and has been recognized as bankrupt within the previous five years.
4. An administrator shall be appointed or dismissed by court (in a bankruptcy process with involvement of the court), or by the meeting of creditors (in a process without involvement of the court) or the National Bank of the Kyrgyz Republic (in respect to insolvency of banks) in compliance with the procedure and conditions established by this Law.
5. An administrator shall be protected and guided by the legislation of the Kyrgyz Republic, and shall enjoy the rights and bear the obligations established by the legislation of the Kyrgyz Republic or an agreement, while performing the duties of an administrator.
6. Whenever a special administrator is appointed without involvement of the court, the newly appointed administrator must conclude a civilian legal agreement with one of creditors authorized by the meeting of creditors to act on behalf of the meeting of creditors. Unless otherwise stipulated by the meeting of creditors, this authorized person shall establish the order of concluding an agreement and terms of the agreement upon consent of the creditors.
7. Creditor (creditors), or the debtor, the National Bank of the Kyrgyz Republic (in cases of insolvency of banks) or the state body for cases of bankruptcy shall have the right to nominate an administrator, provided the requirements in respect to administrators set by this Law have been met. If there are several nominees, the administrator shall be appointed through a competition. Conditions, terms and the procedures for such a competition shall be established by the bodies listed in the paragraph 4 of this Article.
8. An administrator may be dismissed in the following cases:
• on the grounds of a decision by the meeting of creditors made in accordance with the requirements of the article 15 of this Law, as a result of the no confidence vote by the meting of creditors (committee);
• license of the administrator has been withdrawn in accordance with pre-set procedures;
• administrator has violated the requirements of the law of the Kyrgyz Republic while conducing the bankruptcy procedures;
• criminal conviction in respect to the administrator has become effective;
• administrator has filed a petition on dismissal from the position of the administrator;
• emergence or establishment of circumstances that disallow to appoint or continue performing the duties of an administrator;
• due termination (completion) of the procedure for which the administrator has been appointed.
9. Unless otherwise specified in this Law, an administrator, dismissed from the position, must within the period of time, established by the court (meeting of creditors) do the following:
- to refuse to prevent a newly appointed administrator from performing the duties, and provide access to the buildings, assets, banking accounts and documents of the debtor;
- to prepare and present a progress report in the order, set by other normative legal acts on bankruptcy;
- to hand in all the documents related to the process of bankruptcy of a debtor, the list of which is set by other normative legal acts on bankruptcy, to a newly appointed administrator;
- if necessary, to be prepared to provide full information (in writing or orally) concerning the process of bankruptcy of the debtor to a newly appointed administrator;
- to take the inventory of the property and other assets of the debtor along with the newly appointed administrator, representatives of the debtor and other people - the members of the inventory commission;
- to hand in the stamps and seals of the debtor to the newly appointed administrator;
- to perform other duties established by the legislation of the Kyrgyz Republic.
10. After decision on the dismissal of the administrator has been made, the administrator shall have the right to do the following, unless otherwise stipulated by this Law:
- to lodge a complaint to the court of arbitration, against the decision on dismissal;
- to receive the remuneration for the actually performed duties and the time spent, in accordance with the procedure set by a decision of the court or an agreement, in compliance with this Law;
- other rights, established by the legislation of the Kyrgyz Republic.
1. A debtor shall be insolvent and may be recognized or pronounced as bankrupt (insolvent) if at least one of the following conditions have been met:
- if debtor fails to satisfy the lawful claims of a creditor (creditors) to repay the debt or cover other liabilities (for goods, services, etc.) due;
- if debtor refuses to fully satisfy such claims;
- if debtor is not able to fully satisfy such claims;
- if debtor fails to satisfy claims of the creditor, in accordance with the order, set by the article 27-26 of this Law, pending a final decision by the court on the essence of the bankruptcy case.
2. If at least one of the conditions, listed in the paragraph 1 of this article, has been met but the debtor claims the ability to repay the debt, the court shall recognize the debtor as insolvent unless the debtor satisfies the claims of creditors in accordance with the procedures set in the article 27-26 of this Law, after the court has received the petition for recognition of the debtor insolvent and by the time the court has made the final decision in the case.
3. The fact of insolvency of a debtor shall be established by a decision of the court of arbitration (when process of bankruptcy involves the court) or by a decision of a meeting of creditors (if court is not involved). Establishment of the fact of insolvency of the debtor serves as the grounds for recognition (pronouncement) of the debtor as bankrupt (insolvent) and for application of procedures stipulated by this Law in respect to such debtor.
Article 9-1. Size Of Debt: Required For The Limitation Of The Process Of Bankruptcy Of A Debtor1. The following minimal size of the debt is required in order to start the process of bankruptcy in respect of an insolvent debtor:
- at 500 minimal monthly salaries, as the sum of claims of one or several creditors;
- at least 5 minimal monthly salaries, as the claim of a creditor who is a physical entity, including an individual entrepreneur;
- at least one minimal monthly salary, as the claim in respect to a debtor bank, regardless of whether a creditor is a physical or legal entity.
2. Rules of this article shall not apply to imitation of the process of bankruptcy by the debtor.
Article 9-2. Mandatory Initiation Of The Process Of Bankruptcy By A Debtor1. A debtor that predicts the bankruptcy shall be obliged to imitate the process of bankruptcy through the involvement of the court or without at least one month after emergence of at least one of the following circumstances:
- if satisfaction of claims of one creditor or several creditors results in a failure to satisfy fully monetary obligations and liabilities in front of other creditors, including the budget or extra budgetary funds;
- if the debtor fails or is going to fail to fully fulfill the obligations and cover the liabilities in front of the budget and extra budgetary funds;
- if a body that is authorized by the founding documents of the debtor to make a decision on the liquidation of the debtor or the body that is authorized by a stake holder of the debtor - state owned enterprise, has made a decision on liquidation of the debtor as bankrupt;
- if it is established after liquidation of a solvent legal entity that claims of creditors may not be satisfied in full (article 16 of this Law);
- in other cases, stipulated by this Law.
2. Failure to comply with the requirements set in the article 1 of this Article shall result in the subsidiary responsibility of the stake holders, the manager, and members of the liquidation commission of the debtor in front of the creditors.
3. The manager of the debtor, members of the liquidation commission that have committed the violation of the requirements set in this Article may be deprived of the right to hold a managerial position and (or) act as an entrepreneur and manage legal entities (to be disqualified) for a period of time and in accordance with the procedure set by the legislation of the Kyrgyz Republic.
Article 10. Creditors1 . Both domestic and foreign individuals and legal entities, as well as the Kyrgyz Republic , acting through the authorized agencies may be creditors.
2. Interests of all creditors shall be represented by a meeting of creditors and a committee of creditors, established in accordance with this Law to apply the procedures of bankruptcy.
3. Unless otherwise stipulated by this Law, the provisions on creditors shall apply to the tax agencies, bodies of the Social Fund and other authorized public bodies.
4. Stake holder of a debtor (in case of a legal entity) may also be a creditor of a legal entity (this shall not apply to the claim to return the contribution made into the authorized capital of the debtor).
Article 11. Contents Of Creditors' Claims1. In order to establish the minimal size of a debt, as stipulated by the article 9-1 of this Law, the size of the monetary obligations (the principal, including interest duly accrued) shall be taken into account regardless of the size of penalties due for the non execution or improper execution of the obligations, in compliance with the law or an agreement.
2. In order to establish the minimal size of the debt, stipulated by the article 9-1 of this Law, the size of the mandatory payments shall be taken into account regardless of the financial or economic sanctions imposed in compliance with the law.
Mandatory payments shall include: taxes, fees, and other mandatory contributions in to the budget at the respective level as well as extra budgetary funds, following the procedures and terms set by the legislation of the Kyrgyz Republic.
3. Size of the monetary obligations shall be established on the basis of an effective court decision or documents that confirm that the debtor has admitted such claims, or in other cases as stipulated by this Law.
4. If a debtor challenges claims of creditors, the size of liabilities and mandatory payments shall be established by the court, through the procedure stipulated by this Law.
Article 12. Creditors' Meeting1. Participants of the creditors' meeting with the right to vote shall be considered as creditors (or their representatives), and in the instances provided by this Law, other authorized bodies as well.
2. Depending on the applied bankruptcy procedure, the creditors meeting shall be organized and held by the stake holder of the debtor, the insolvent debtor himself, creditors, or by the administrator.
After the first meeting of creditors, the meeting itself, the committee of creditors and the administrator shall have the right to call on subsequent meetings of creditors.
3. Unless otherwise specified in the normative legal acts concerning the bankruptcy, these persons (bodies) must publish a notice of the meeting in the national newspaper (at least once) no less than 10 days prior to the date of the meeting and inform known creditors with the size of claims over 100 minimal monthly salaries by sending a letter or handing the notification in at least 10 days prior to the date of the meeting. One letter shall be sufficient for a proper organization of a meeting or creditors.
4. The creditors' meeting may make any decision in respect to obligations of the debtor, which shall not contradict to this Law, decisions of the court and not impede the administrator's activity.
5. To participate in the first meeting of the creditors with the right to vote, the creditor must within seven calendar days prior to the beginning of the meeting submit his/her demand (claim) to persons who initiated this meeting, or to a special administrator, unless otherwise stipulated by this Law.
The procedure of formation and submission of claims shall be established by the other normative and legal acts in respect to bankruptcy. legislation. Documents confirming the presence, amount and grounds of the creditor's demands must be attached to such claim.
6. To participate in the meeting of the creditors with the right to vote, a secured creditor must estimate the value of the subject of pledge, and announce it at the first meeting of creditors. The right of a secured creditor to vote shall be determined as the difference between the amount of the claim of the secured creditor, and estimated value of the subject of pledge.
A secured creditor shall have the right to waive the right to security. In this case the voting right of the secured creditor shall be established as the value of the claim but the creditor shall not have the right to reverse this decision afterwards.
An administrator shall have the right to purchase the collateral from the secured creditor at the estimated value.
7. In cases, stipulated by this Law, decisions of the creditors in the debtor's bankruptcy process with the involvement of the court must be approved by the court.
8. Decisions of the creditors' meeting in the process of bankruptcy must be formalized by the protocol of the meeting and signed by a chairperson of the meeting. 9. Creditors' meeting shall be held at the place of location (residence) of the debtor, unless otherwise established by the meeting (committee) of creditors, or administrator.
Article 13. Making Decisions At The Creditors' Meeting1. Unless otherwise stipulated by this Law:
- A properly called creditors' meeting (by the committee of creditors) shall be considered valid, if attended by creditors claiming 51 or more per cent of the total amount of debts of the debtor.
- Meeting of creditors properly called by the debtor or the administrator shall be considered as valid regardless of the number of creditors attending the meeting or the size of their claims.
2. If there are less than 50 creditors, the chairperson of the meeting must make sure the decisions of the meetings have been sent to the creditors through registered mail or handed in against a receipt within three days after making decisions. This period of time may be extended by the meeting of creditors if there are more than 50 creditors.
3. Unless otherwise stipulated by this Law, decisions of the first or any other subsequent meeting of creditors in respect to any issue shall be considered as valid if creditors in attendance that claim 51% and over of the debt have voted for such decision. Size of the debt claimed by those absent from the meeting shall be disregarded.
4. In case no creditor has arrived at the meeting, called up properly by the debtor or the administrator, all proposals by the debtor or the administrator shall be considered as approved by the creditors and issues in the agenda of the meeting shall be considered as passed by the meeting of creditors, in order to reduce the costs of the process of bankruptcy.
Article 14. Creditors' Committee1. Meeting of creditors shall have the right to elect a committee of creditors of 3-7 persons, at any time. Creditors' committee represents interests of creditors, and carries out the control over the acts of the administrator in compliance with the procedure established by this Law.
2. To implement its functions, the creditors' committee may:
- request information from the administrator on financial state of the debtor;
- request information from the administrator on the process of bankruptcy;
- provide recommendations to the administrator;
- express no confidence vote to the administrator in compliance with the procedure provided by this Law;
- call a meeting of creditors by written notice of all creditors.
Creditors' meeting may be held within no less than 2 weeks after the date of mailing the last notice. Special administrator must provide to the committee the information on all creditors known to him.
3. The creditors' committee shall be considered effective at its properly called meetings if attended by all members of the committee (or their representatives).
Creditors' committee shall make decisions by the ordinary majority vote of the committee members. Should the number of votes split equal, vote of the chairperson shall be decisive.
Article 15. Expression Of No Confidence In Respect To The Administrator1. In the course of the bankruptcy process, the creditors' meeting and creditors' committee may express no confidence to the administrator.
2. n case of the imitative coming from the committee of creditors the administrator shall be obliged to raise the issue of no n confidence at the meeting of creditors.
3. Meeting of creditors to consider the issue of no confidence shall be organized and conducted by a creditor (creditors), the committee of creditors or the administrator upon agreement with (upon demand of) creditors.
4. The initiating creditor, the committee of creditors or the administrator upon demand of the initiating creditor must inform all known creditors about the meeting, if their claims exceed 100 minimal salaries through registered mail or delivering notification in person against a receipt at least 10 days prior to the date of the meeting.
5. Properly organized meeting of creditors shall be considered effective if attended by 51% and over of the total size of the debt as of the date of the meeting (quorum of the meeting). Meeting of creditors shall be attended by creditors (or representatives) who have the right to vote.
6. Decision of the properly organized creditors' meeting concerning the expression of no confidence in the administrator and proposal of the new candidacy shall be deemed adopted, if voted by the majority of the total number of creditors attending the meeting, including the creditors attending the meeting and claiming 75 per cent or more, of the total amount of the debtor's debt (majority in value). The amount of debt payable to those who do not attend the meeting is not taken into consideration.
7. Decision of the meeting of creditors must be legalized through a protocol of the meeting and shall be signed by the chairperson of the meeting.
8. Regardless of whether the process of bankruptcy involves the court or not, it must notify the administrator, as well as creditors who have not attended the meeting of creditors on the decisions made at the meeting through registered mail or personal delivery of the notifications against a receipt within three days after the day of the meeting.
9. I f the process of bankruptcy involves the court the decision of a meeting of creditors on the dismissal of an administrator and appointment of a new administrator shall be subject to approval by the court of arbitration. The court of arbitration may approve the meeting of creditors provided all the interest of creditors as well as requirements of this Law have been satisfied. The court of arbitration shall draw its opinion as to the decision made and this opinion may be lodged a complaint against in the court.
Article 16. Liquidation Of A Solvent Legal Entity1. A solvent legal entity shall be liquidated on the grounds stipulated by the paragraph 2 of the article 96 of the Civil Code of the Kyrgyz Republic in accordance with the requirements of the article 96-99 of the Civil Code of the Kyrgyz Republic. Claims of creditors shall be covered at the expense of the liquidated legal entity.
2. In case the liquidation commission, stake holders, or the manager of a legal entity, or the body authorized by the founding documents of the legal entity to liquidate this legal entity establish within the process of liquidation that cash available at the legal entity shall not be sufficient to satisfy the claims of all creditors in full, the legal entity will have to be liquidated through the procedure established by this Law.
3. Decision on liquidation of a bankrupt legal entity through the involvement of the court or without involvement of the court shall be made by stakeholders of the debtor or the body authorized by founding documents of a legal entity to make a decision to liquidate this legal entity. After decision has been made and the liquidation commission has presented its final performance report the authorities of the liquidation commission shall be terminated.
4. Failure to make a decision indicated in the paragraph 3 of this Article shall entail subsidiary responsibility of the stake holders, the managers, or the members of the liquidation commission for the liabilities of the debtor in front of creditors.
5. The manager of a debtor, members of the liquidation commission that have committed a violation of the requirements set in this article may be deprived by the court to hold an executive position or manage legal entities (to be disqualified) for a period of time and through the procedure, established by the legislation of the Kyrgyz Republic.
Article 17. State Body In Charge Of Cases Of Bankruptcy1. The State agency in charge of bankruptcy cases shall implement the public policy regarding preventing bankruptcies and fostering the implementation of the bankruptcy process in compliance with this Law. The Government of the Kyrgyz Republic shall approve the Regulation on the State agency in charge of bankruptcy cases.
2. The State agency in charge of bankruptcy cases shall:
- approve the requirements to persons implementing professional activity as administrators in bankruptcy process;
- issue licenses for performing the activity of the individuals who act as professional administrators in the bankruptcy process, and withdraw such licenses;
- organize the training system for administrators;
- foster implementation of bankruptcy of a missing debtor;
- register and analyze insolvent large, economically or socially substantial legal entities; submit proposals on financial improvement of such legal entities to the Government of the Kyrgyz Republic;
- prepare by the request of the court, office of the state prosecution, or of the authorized agency an opinion on presence of features of insolvency, and a fictitious or predetermined bankruptcy;
- represent the interests of the state in the process of bankruptcy of a debtor, in which the state is a stake holder, or debtors in respect to which the state is a creditor;
- upon request from a creditor of the first or the second priority, have the right to initiate the process of bankruptcy of a debtor, in case the creditor has no ability or the knowledge to initiate the process of bankruptcy individually;
- implement other powers provided by laws and other normative legal acts.
3. The State agency in charge of bankruptcy cases may issue legal acts on issues related to bankruptcy that shall not contradict this Law, and other legal acts of the Kyrgyz Republic issued in compliance with this Law.
4. The State agency in charge of bankruptcy cases shall form territorial bodies the powers of which shall fall within the area of jurisdiction of the State agency in charge of bankruptcy cases.
5. For purposes of implementation of provision of this Law, concerning the implementation of the process of bankruptcy in respect to absent debtors and creation of additional guarantees for the activities of administrators the State agency in charge of bankruptcy cases shall have the right to establish a specialized fund. Regulation on the specialized fund under the state body for cases of bankruptcy shall be approved by the Government of the Kyrgyz Republic.
Article 18. Wrongful Acts During The Process Of Bankruptcy1. Acts made within the process of bankruptcy shall be considered as wrongful if committed by any person, including the staff of the state agency in charge of bankruptcy cases after emergence of any of the conditions prescribed in the paragraph 1, article 21 of the Law, if a person committing such acts knows of insolvency of the debtor in accordance with the paragraphs 1 and 2 of the article 9 of this Law. The following acts by shall be considered wrongful:
- initiation of a fraudulent process of bankruptcy;
- illegal concealment, arrest, seizure, appropriation, exaction, and transfer of property and concealment of debts of a debtor, including after the commencement of the process of bankruptcy;
- concealment or destruction, falsification of records, insertion of false records in the accounting books related to the debtor;
- making fraudulent claims in respect to a debtor;
- sale or pledge of any property of the debtor, purchased through a credit and unpaid, or used as a collateral, while it is prohibited to alienate or use the property for double collateral;
- giving, offering, receiving or attempting to obtain any money or assets, remuneration, compensation, reward, advantage for a promise to act or forbearing to act in any case of bankruptcy;
- refusal to cooperate with a special administrator in order to disclose the property of the debtor, or to obtain the property or other information about the debtor, or its debts and debt obligations, or provision of false information to the special administrator;
- direct or indirect acquisition of assets of the debtor by the administrator;
- using the name or trademark of a debtor subject to bankruptcy process or debtor that has terminated its activity in compliance with the procedure established by the legislation of the Kyrgyz Republic;
- deliberate creation or increase of the insolvency of the debtor, or incurring damage to the debtor in the personal interests or in the interests of other persons;
- impedes the administrator in performance of duties;
- failure to satisfy lawful claims of an administrator;
- concealment of information from the court or from the administrator, as to who, when and how has been transferred the property of debtor;
- concealment of information on any transactions, stipulated by the article 67 of this Law, from the court or from the administrator;
- any actions that fit the definition of predetermined or false bankruptcy;
- receiving any property or cash from the debtor by a creditor in case of illegal satisfaction of claims through the damage to the interests of other creditors.
2. Individuals who commit the wrongful actions stipulated by this Article shall be liable in accordance with the criminal, administrative and civil legislation of the Kyrgyz Republic.
3. This article shall not apply to persons listed in the paragraph 8 of the article 21 of this Law, when such persons act to exercise their rights given in accordance with the legislation of the Kyrgyz Republic.
Article 19. Fictitious And Predetermined Bankruptcy1. If a legal entity or individual entrepreneur who is able to fully satisfy the claims of the creditors makes a knowingly false declaration of himself a bankrupt for the purpose of misleading the creditors, and to receive a stay of repayment period or permission to repay by installments of sums payable to the creditors, or discount from debts, as well as release from the duty to pay (fictitious bankruptcy), the creditors may demand that the debtor indemnify the inflicted losses, and make the guilty persons answerable in compliance with the procedure established by law.
2. If the bankruptcy has been caused by actions (omissions) by the leader of the debtor (debtor's stake holder or individual entrepreneur) which led to predetermined creation or increase of insolvency in personal interests, or in the interests of other individuals (predetermined bankruptcy), the creditors may demand that guilty persons indemnify the inflicted damages and make them otherwise answerable in compliance with the procedure established by law.
Article 20 Invalidity Of DecisionThe court, the meeting of creditors, the creditors committee, the temporary administrator, the conservator, the external manager, special administrator as well as the debtor or its stake holder, shall have no authority to accept decisions, if such decisions contradict to the legislation of the Kyrgyz Republic law, or breach the rights of creditors, while decisions shall be held invalid.
Article 21 Disposal Of Assets Of A Debtor Under Threat Of Initiation Or Commencement Of The Process Of Bankruptcy1. Provisions of this article shall apply upon emergence of one of the following events:
- stake holders or managers of a debtor inform one of the creditors on the insolvency of a debtor in any way;
- the first notification on the meeting of creditors has been published by a debtor in a newspaper or the notification on the imitation of the process of bankruptcy by creditors;
- the court has accepted a petition on recognition of a debtor as bankrupt;
- the process of bankruptcy has been started in accordance with this Law;
- stake holders or the body authorized by founding documents or by decision of stakeholders of a legal entity, have made a decision on turning the liquidation of a solvent legal entity into the process of bankruptcy of a debtor.
2. Upon occurrence of any of the events stipulated in the paragraph 1 of this article, the stake holders of a debtor shall not have the right to claim their contributions into the capital of the debtor, or their share in the property of the debtor (in cash or in kind) or the right to withdraw their share (contribution) in any other way.
3. Upon occurrence of any of the events stipulate din the paragraph 1 of this article, no one, including the creditor or the body of the state (except persons and bodies, listed below) shall have the right to seize, arrest, exact or appropriate any property of the debtor, or establish control over the banking accounts, while stake holders or managers of a debtor or an individual entrepreneur shall not have the right to dispose of assets of the debtor or fulfill (accept) any obligations voluntarily without consent of the following:
- court of arbitration;
- administrator;
- meeting of creditors (in absence of an administrator).
4. In absence of a prohibition imposed by the court or the administrator, the debtor shall have the right to make following payments without agreeing with the persons and bodies listed in the paragraph 3 of this article:
• pay the monthly wage to workers (excluding the workers who are stake holders of the debtor at the same time) in accordance with the pay roll;
• pay for recurrent costs, required to maintain the operations of a debtor (phone, gas, electricity, utilities, power or supplies of already delivered goods used in the production), excluding expenses made prior to emergence of any of the events listed in the paragraph 1 of this article.
Rules required for the implementation of this provision shall be set by other normative acts on bankruptcy approved by the Government of the Kyrgyz Republic.
5. Any assets of the debtor disposed of by the debtor in violation of this article shall be exacted by the administrator from the third parties.
Creditors of other persons (bodies) hat have illegally seized, arrested, exacted or appropriated assets that belong to the debtor must by demand of the court, the administrator or the debtor return the assets or control over assets to the debtor. In this case the person or the body that demands to return the assets shall not have to prove that such creditor or other persons and bodies have acted illegally.
Dishonest creditors, persons or bodies must return assets or return the value of assets to the administrator.
6. The court shall make a decision to return the assets (or cost of assets) to third parties if they prove that assets have been purchased at a reasonable (market) price and they were not aware of the events listed in the paragraph 1 of this Article.
7. Persons who wrongfully disposed of assets of the debtor, or seize, arrest and exact assets of the debtor after occurrence of any of the events listed in the paragraph 1 of this article must compensate for the losses of creditors and be liable in accordance with the article 18 of this Law.
8. Provisions of this article shall not apply to the following rights:
- the right of a secured creditor to use the lien in respect to the collateral, if the agreement on collateral has legal force and has been made prior to the events listed in the paragraph 1 of this article, taking into account the requirements of the article 102 of the Civil Code of the Kyrgyz Republic and article 76 of this Law;
- the right of a stakeholder or any other person who has the right to transfer the property to the debtor, given by the stake holder (under an agreement on the transfer of property for ownership or use). When events stipulated in the agreement arise, a stake holder or any other person who has the right over such property shall be able to request such property from the debtor.
9. Provisions of this article shall not apply after the court decision on denial of recognition of a debtor as bankrupt has become effective, or since the moment of a decision made by the meeting of creditors to refuse to start a process of bankruptcy without involvement of the court, or since the National Bank of the Kyrgyz Republic has made a decision to refuse to start the process of bankruptcy of a bank.
Article 22. Consequences Of Recognition (Pronouncement) Of A Debtor As Bankrupt1. As of the moment of recognition or pronouncement of a debtor bankrupt with or without involvement of the court the following events shall occur:
• All promissory notes shall be considered to be due, unless it has already happened earlier.
• Accrual of all penalty surcharges and interest on promissory notes of debtor shall stop.
• Fines (penalties) and interest accrued as of the moment of commencement of the process of bankruptcy shall be due in accordance with this Law.
• Information regarding financial condition of debtor shall no longer be considered to be confidential or a commercial secret.
• Making deals regarding property alienation of debtor or resulting in passing its property to third party, shall be allowed exactly in the way set by this law.
• Actions aimed at execution of judicial decisions regarding debt paybacks of debtor and arresting the property of a debtor, and compulsive executions of liabilities of debtor shall be stopped.
• All requests to debtor that bear property-form can be done in bankruptcy process framework only.
• Secured creditor can lay his claims to administrator and have its claims satisfied in accordance with this law.
2. Rules of the paragraph 1 of this article shall apply after the debtor, due to a joint decision made with the creditors, pronounces its insolvency, unless otherwise stipulated by the agreement with creditors.
Article 23. Notification For The Public Body In Charge Of Registering Legal Entities And Individual Entrepreneurs1. The court or the administrator must within three days send a written notification to the public body in charge of registering legal entities and individual entrepreneurs in order to make a respective record in the state register. The notification is filed in the following cases:
- after recognition of a debtor bankrupt and after commencement of the process of bankruptcy, along with the indication of the procedure employed and the information on the administrator;
- after the procedure within the process of bankruptcy has been replaced with another procedure;
- upon completion of the procedure within the process of bankruptcy;
- upon completion of the process of bankruptcy.
2. In case of completion of the process of bankruptcy the record of bankruptcy of the debtor in the state register shall be annulled.
3. After completion of the process of bankruptcy through the liquidation of the debtor (in case of a legal entity) the debtor shall be excluded from the register and its activity shall be terminated.
4. As of the moment the court has recognized an individual entrepreneur bankrupt, registration of a person as an individual entrepreneur shall be terminated.
5. Actions by the public body registering legal entities and individual entrepreneurs listed in this article shall be taken within 10 days after receipt of a notification from the court or the administrator.
Article 24. Recognition Of A Debtor Insolvent1. A debtor, who has made all payments in favor of creditors in accordance with this law against their claims, shall be considered as solvent court (in case of a bankruptcy process with the involvement of the court) or by the administrator (in case of the bankruptcy process without involvement of the court). A debtor which is a legal entity shall have the right to continue its activities upon consent of all stake holders.
2. Claims made by creditors mentioned in the paragraph 1 of this article shall not include the claims made by creditors who are at the same time stake holders of the debtor, except cases stipulated by the paragraph 4, article 10 of this Law.
Article 25. Safekeeping Documents After Completion Of The Process Of Bankruptcy1. After completion of the process of bankruptcy, all reporting and other documents shall be forwarded for safe keeping to the state archives or the public body in charge of cases of bankruptcy or the stakeholders of the debtor, in case the debtor has been recognized solvent.
Article 26. Resuming The Process Of Bankruptcy1. Persons listed in the article 27-2 of this la shall have the right to appeal to the court within 10 years after completion of the process of bankruptcy in order to resume the case of bankruptcy if assets of the debtor concealed by the stake holders or the managers of the debtor have been revealed.
CHAPTER 1-1
CONSIDERATION OF CASES OF BANKRUPTCY IN THE COURT
Article 27. Consideration Of Cases By The Court
1. Cases of bankruptcy shall be identified as cases of specialized adjudication.
2. Cases of bankruptcy shall be considered in accordance with this article, unless otherwise stipulated by this Law.
3. Procedures of consideration of cases of bankruptcy shall be applied in accordance with this article, unless otherwise stipulated by this law.
4. Cases of bankruptcy may not be forwarded to the court of treaty for consideration.
Article 27-1. Jurisdiction1. Bankruptcy cases fall under the jurisdiction of the court in the place of residence of the debtor (location of the debtor).
2. Claims in respect to the debtor with unknown location (place of residence) may be presented to the court in the place of location of the debtor's property or at the last known place of residence (location) in the Kyrgyz Republic.
Article 27-2. The Right To Appeal To The Court1. The following persons and entities shall have the right to appeal to court:
- Debtor;
- Creditor or group of creditors;
- Body of the state, in charge of bankruptcy cases, as stipulated by this law;
- The National Bank of the Kyrgyz Republic, in cases stipulated by this law;
- Other persons and entities, in cases stipulated by this law.
2. Persons, listed in the paragraph 1 of this Article shall have the right to file a suit to the court concerning the recognition of debtor as bankrupt in absence of the pre-trial procedure for the dispute settlement.
Article 27-3. Parties To A Bankruptcy Case1. The following persons shall be the parties of a case of bankruptcy:
- petitioner;
- debtor;
- creditor or creditors.
2. Parties to a case of bankruptcy shall enjoy the rights and bear the responsibility in accordance with this Law and the Code of Arbitration Procedures of the Kyrgyz Republic. Whereas the petitioner shall have the rights and responsibilities stipulated by the Code of Arbitration Procedures in respect to the plaintiff, whereas the debtor has the rights and obligations stipulated by the Code in respect to the defendant.
3. Prior to making a decision on the essence of the case upon petitions from other creditors of the debtor, the court shall have to involve the creditors into the trial as parties to the case.
4. In cases of bankruptcy the rules of the third parties (that may or may not have their own claims), as well as the rules of replacement of inappropriate parties, stipulated by the Code of Arbitration of the Kyrgyz Republic shall not apply.
Article 27-4. Parties To An Arbitration Case1. In addition to parties involved into a case, the process of arbitration of the case of bankruptcy may involve the administrator, experts, translators, witnesses and other persons, in some cases, stipulate by this law.
2. Parties to the arbitration process to consider a case of bankruptcy shall enjoy their rights and bear obligation in accordance with this Law and the Code of Arbitration Procedures of the Kyrgyz Republic.
3. In order to explain any issues during consideration of a bankruptcy case, that shall require special expertise, the court may appoint experts by request of a person involved into the trial or by its own initiative. The costs associated with the involvement of experts shall be considered as the costs of the bankruptcy process.
4. Any person who may have any information or know about circumstances that shall matter for the correct adjudication of the bankruptcy case, including the parties, stake holders and employees of the debtor, representatives of the local self - government, other entities, etc. may act as witnesses.
5. The party that requests to call upon a witness must indicate: what information or circumstances that shall matter for the case may the witness confirm and disclose the name and place of residence (employment) of the witness.
6 . The following persons may not be called upon or questioned as witnesses:
- Attorneys (in a civil case) or defenders (in a criminal case) to speak about circumstances they have come to know due to the execution of their duties of an attorney or a defender;
- Persons who shall not be able to correctly perceive facts or interpret and testify due to their physical imparities or mental disabilities.
1. The court shall start a case of bankruptcy on the ground of a petition for recognition of a debtor bankrupt filed by a person that shall have the right to appeal to the court in compliance with the article 27-2 of this Law.
2. Petition to the court shall be filed in compliance with the requirements of this Law.
3. A petitioner filing a petition to recognize a debtor bankrupt shall pay the state duty through a procedure and at the rate established by the legislation of the Kyrgyz Republic.
Article 27-6. Petition By A Debtor1. A legal entity, the debtor, shall appeal to the court with a petition to recognize this legal entity as bankrupt on the grounds of a decision by the body authorized to make a decision on liquidation of the debtor, in accordance with the founding documents of the debtor, or on the grounds of a decision by the body authorized by the stakeholder of the debtor - state owned enterprise, unless otherwise stipulated by the law.
2. Petition by a debtor on recognition of the debtor bankrupt shall be filed in typewriting. The petition shall be signed by the debtor (in case of an individual entrepreneur) or by the manager of the debtor (in case of a legal entity) or an acting manager.
3. The following must be indicated in the petition by the debtor:
- title of the court appealed to;
- name (title) of the debtor and postal address;
- all creditors known by the debtor, including secured creditors, and amounts due to them;
- request to recognize the debtor bankrupt and start the procedure of bankruptcy (special a administration, sanation, rehabilitation, conservation - in respect to banks);
- data on the approximate value of assets of the debtor;
- other data, the debtor should believe necessary to indicate for the correct settlement of the bankruptcy case, as well as recommendations available;
- check list of all documents attached.
4. The requirement of the smallest size of the debt, established by the article 9-1 of this Law shall not apply for the petition on recognition of the debtor as bankrupt by the debtor.
5. The debtor shall not have to send copies of the petition and documents attached to the creditors.
Article 27-7. Documents To Be Attached To A Petition By A DebtorThe following documents shall have to be attached to the petition for recognition of the debtor bankrupt, filed by the debtor:
1. Copies of founding documents;
2. Copies of the certificate of the state registration as a legal entity or a an individual entrepreneur;
3. Balance sheet as of the last reported date or replacing documents;
4. Decision of stake holders of the debtor (in case of a state owned enterprise) or stake holders of a legal entity that the debtor should appeal to the court with a petition on recognition of the debtor bankrupt;
5. Documents that confirm the existence of the debt and lack of ability of the debtor to satisfy fully claims of creditors;
6. Documents that prove the payment of the state fee and postal expenses, as required.
Article 27-8. Petition By Creditor1. Creditor shall file a petition to the court in typewriting. The petition shall be signed by the creditor (in case of an individual entrepreneur) or by the manager of the creditor (in case of a legal entity) or their representatives.
2. The following must be indicated in the petition:
- title of the court appealed to;
- name (title) of the debtor and postal address;
- name (title) of the petitioner and postal address
- size of claims of the creditor in respect to the debtor and amount of fines and interest due;
- obligations of the debtor in front of the creditor which has given rise to the claim and dates of maturity of the obligations;
- request to recognize the debtor bankrupt and start the procedure of bankruptcy (special administration, sanation, rehabilitation, conservation - in respect to banks);
- other data, the creditor believe necessary to indicate for the correct settlement of the bankruptcy case, as well as recommendations available;
- check list of all documents attached.
3. The creditor shall have to send the copy of the petition to the debtor. In case the location (place of residence) of the debtor is unknown, the copy of a petition may be sent to the place of location of the property of debtor or the last known address (place of residence) of the debtor in the Kyrgyz Republic.
4. Petition filed by the National Bank of the Kyrgyz Republic, or the state body in charge of bankruptcy cases shall be filed to the court through the compliance with the requirements stipulated by this law in respect to a petition by a creditor, unless otherwise stipulated by the legislation of the Kyrgyz Republic.
Article 27-9. Joint Claims Of Creditors1. Petition by a creditor on recognition of a debtor bankrupt may be based upon the consolidated debt and various obligations.
2. Creditors shall have the right to put their claims in front of the debtor together and appeal to the court with one single petition. This petition shall be signed by all creditors concerned. Creditors may assign one of them to deal with the case.
Article 27-10. Documents To Be Attached To A Petition By A Creditor1. The following documents shall have to be attached to the petition for recognition of the debtor bankrupt, filed by a creditor:
- evidence of the grounds for claims, including the evidence of obligations of the debtor in front of creditors, as well as the evidence of existence and the amount of debt;
- evidence of the grounds for the petition by a creditor, including the following, if applicable: effective decision of the court of arbitration, the court or the court of treaty, that has considered the claims of the creditor in respect to the debtor; evidence that the debtor has recognized such claims; executive documents (list of execution, claims of payment, accepted by the debtor, endorsement by the notary, etc.);
- other grounds for the claim of the creditor;
- payment of the state fee and postal expenses as required;
- evidence of a copy sent to the debtor;
- decision of the general meeting of creditors (if available) concerning the petition to the court for starting the process of bankruptcy through the court involvement, made in accordance with the article 30 of this Law.
2. If a petition has been signed by a representative of the creditor, the petition must also be accompanied with a power of attorney that confirms the powers of the person that has signed the petition.
3. If creditors request one of the creditors to deal with the case, the petition must also be accompanied with a power of attorney, that confirms the powers of such person to deal with the case, signed by all creditors.
Article 27-11. Acceptance Of A Petition For Recognition Of The Debtor Bankrupt1. The judge must individually decide to accept a petition for recognition of a debtor bankrupt.
2. The court must accept the petition, filed through the compliance of all requirements set by this Law.
3. The court shall draw a conclusion about accepting the petition, which must be sent to the creditors and the debtor within 5 days from the day the petition has been received in the court.
4. In the conclusion on acceptance of the petition the judge shall also indicate what actions are going to be taken to prepare the case for the examination, for appointment of the date and the place of consideration by the court.
5. Execution of all judicial and other actions in respect to the satisfaction of claims and arresting assets of the debtor shall be suspended as of the moment the petition has been accepted for the consideration, for the whole period of consideration of the case. Provisions of this paragraph shall not apply to the rights of persons listed in the paragraph 8, article 21 of this Law.
6. Restrictions as to the right of the debtor to dispose of the property may be imposed upon the debtor only within the framework of the process of bankruptcy.
7. Conclusion on acceptance of the petition may not be lodged a complaint against.
Article 27-12. Rejection Of A Petition For Recognition Of A Debtor Bankrupt1. The court shall reject a petition for recognition of the debtor bankrupt in the following cases:
- a debtor may not be recognized as the bankrupt in accordance with this Law;
- a debtor has been previously recognized as bankrupt (without involvement of the court) and the procedure of bankruptcy in respect to the debtor has been started;
- a debtor has been liquidated (activity of an individual entrepreneur has been terminated) and excluded from the state register;
- amount of the debt is below the minimal size established by the article 9-1 of this Law;
- petitioner has no right to appeal to the court in accordance with the article 27-2 of this law;
- there is a valid decision of the court concerning the case of bankruptcy between the same parties, the same subject and the same grounds.
2. In case of rejection of a petition the court shall make a justified conclusion, to be sent to the petitioner and the debtor within five days from the day the petition has been receive in the court. The conclusion to deny acceptance may be lodged a complaint against.
3. In case of reversal of the conclusion through the procedure of supervision, the petition shall be considered as filed as of the day of the initial appeal to the court.
Article 27-13. Returning The Petition For Recognition Of The Debtor As Bankrupt1. The court shall return the petition for recognition of the debtor bankrupt in the following cases:
- requirements set in the articles 27-6 through 27-10 of this law have not been met;
- the case shall not fall under the jurisdiction of this court;
- creditor has failed to provide the evidence of sending (handing in) a copy of the petition to the debtor;
- absence of other documents, that prove the payment of the state duty and other court expenses as required, and in cases of deferral of payment allowed by law, evidence of the deferral of payment of the state duty or reduction of the amount of the state duty, or absence of a request for reduction of the size of the duty or rejection of such a request;
- petitioner has applied to withdraw the petition prior to the conclusion on acceptance of the petition for consideration.
2. In case the Law requires the debtor to appeal to the court and petition is not accompanied with documents required by the article 27-7 of this Law, such a petition shall be accepted by the court, while missing documents shall be needed for the preparation of the bankruptcy case for the consideration by the court.
3. The judge shall draw an opinion to return the petition and this conclusion shall be forwarded to the petitioner and the debtor within five days after the petition has been received by the court.
4. In case of reversal of the conclusion through the procedure of supervision, the petition shall be considered as filed as of the day of the initial appeal to the court.
5. Return of the petition may not prevent second appeal to the court after drawbacks have been fixed.
Article 27-14. Measures To Secure The Claims Of Creditors1. The court upon request from the petitioner must take necessary precautions to secure the claims of creditors in accordance with the Code of Arbitration of the Kyrgyz Republic.
2. In addition to measures stipulated by the Code of Arbitration of the Kyrgyz Republic, the court shall have the right to take the following measures:
- appoint the temporary administrator by request from the petitioner in order to maintain the assets until the decision on the essence of the case has been made;
- draw an opinion on suspension of the execution of all judicial and other actions, associated with the payment of debts and arresting assets of the debtor (except actions by persons listed in the paragraph 8, article 21 of this Law);
- prohibit that bodies of management of the debtor (or the individual entrepreneur) should make any transactions without consent of the court or the temporary administrator (if applicable) associated with the alienation or disposal of property: leasing property, pledging, making an in kind contribution into the capital of companies and partnerships, etc.; any transactions associated with obtaining and issuing loans, issuing guarantees, transfer of the debt, waiving the right to claim, and establishment of the assets property trust management, etc.;
- prohibit that bodies of management of the debtor (or the individual entrepreneur) should make any decisions without consent of the court or the temporary administrator (if applicable), concerning the following: reorganization (merger, spin up, division, separation and transformation) and liquidation of the debtor; termination of activities of an individual entrepreneur: establishment of legal entities or involvement with other legal entities; establishment of branches and subsidiaries; payment of dividends; issue of bonds or other securities by the debtor; withdrawal from the number of stake holders of the debtor; acquisition of previously issued shares from shareholders; participation in associations, unions, holding companies, financial and industrial groups and other associations of legal entities, etc.;
- other measures aimed at safe keeping the property of the debtor.
3. Measures for securing claims of creditors shall be in effect respectively: until the court has made a decision to recognize the debtor bankrupt or until the court has made a decision to deny the recognition of the debtor bankrupt.
4. Upon request from a party to the case of bankruptcy the court shall have the right to cancel such measures for securing the claims of creditors until occurrence of events, listed in the paragraph 3 of this article.
Article 27-15. Opinion Of The Debtor Concerning The Petition To Recognize The Debtor Bankrupt1. The debtor shall have the right to provide the court with its opinion concerning the petition of the creditor, the state body for cases of bankruptcy, the National Bank of the Kyrgyz Republic, accompanied with documents that serve as the evidence for challenging the petition and the evidence that the petitioner has been sent a copy prior to the day of consideration of the case.
2. In addition to the data, prescribed by the Code of Arbitration of the Kyrgyz Republic, the debtor's opinion must include the following information:
- debtor's arguments against the claims of the petitioner;
- total amount of arrears of the debtor in respect to the creditors;
- information about the property of the debtor, including cash at accounts with banks and other financial lending institutions, accounts numbers and postal addresses of banks and other financial institutions;
- evidence of satisfaction of claims of the petition should the debtor recognize such claims prior to the conclusion by the court on acceptance of the petition;
- other information the debtor believes necessary to provide for purposes of the correct consideration of the bankruptcy case, as well as recommendations available.
3. Absence of an opinion of the debtor shall not impede the consideration of the bankruptcy case.
Article 27-16. Time Frame For Consideration Of The Bankruptcy CaseBankruptcy case shall be examined by court within a month, starting from the day when petition has been submitted. Period mentioned above may be protracted in exceptional circumstances approved by court, but for no longer than a month.
Article 27-17. Issues Considered By The Court Prior To Making A Decision1. Prior to making a decision the court shall consider the issues stipulated by this Law as well as the Code of Arbitration of the Kyrgyz Republic. In addition the court must establish the following circumstances of importance for the case:
• whether the petitioner has the right to file a petition on recognition of the debtor bankrupt in accordance with the article 27-2 of this Law;
• whether the debtor is liable to the process of bankruptcy;
• whether the size of the debt meets the requirements set by the articles 9-1 and 11 of this Law;
• whether obligations of the debtor in front of the creditor comply with the requirements of the legislation of the Kyrgyz Republic or an agreement between the parties;
• existence of grounds for claims of the petitioner.
2. If in front of the court, the debtor claims the ability to repay the debt, the court may give the debtor an opportunity to repay the debts within the time frame and through the procedures set by the article 26-27 of this Law. Otherwise the debtor must be recognized as bankrupt and one of the procedures of the process of bankruptcy must be employed.
Article 27-18. Grounds For Recognition Of The Debtor Bankrupt1. Presence of any circumstances stated in paragraphs 1 and 2 of the article 9 of this law shall be enough for finding debtor bankrupt.
2. In case, court establishes the existence of circumstances stated above and in paragraph 1 of the Article 27-17 of this Law, and any of the circumstances listed in the paragraph 1 of this article, the following factors shall not be considered as the grounds for recognizing the debtor non bankrupt:
- debtor's ability to pay back its debts in the future;
- presence of significant financial reserves, not included into the assets, existence of unaccomplished construction, profit in the past, reputation, demand for products, raw materials, developed infrastructure, potential customers, etc.
1. The court shall draw its opinion in the following circumstances:
- accepting petition of finding debtor bankrupt;
- rejecting petition;
- handing back the petition;
- suspending the bankruptcy process;
- postponing case examination;
- leaving petition without examination;
- turning one bankruptcy case into another;
- termination of the proceedings;
- in different circumstances stated in this law.
2. The court shall draw its opinion in a separate act by the rules of the Code of Arbitration of the Kyrgyz Republic.
3. Court's opinion shall be effective as of the moment it has been taken.
4. Court's opinion may be appealed within 10 days from the moment it has been taken through the procedure of supervision.
Article 27-20. Decision Of The Court1. The court shall make a decision in the case of bankruptcy in the following circumstances:
- debtor has been recognized as bankrupt and the process of bankruptcy has been started;
- rejection of recognition of the debtor bankrupt;
- completion of the process of bankruptcy of a debtor.
2. Court's decision shall be effective as of the moment it has been taken.
3. Court's decision may be appealed within 10 days from the moment it has been taken through the pre established procedure.
Article 27-21. Court's Decision Of Finding Debtor Bankrupt And Setting A Bankruptcy Process1. Decision of the court to recognize the debtor bankrupt and set the procedure of bankruptcy shall be made in case the features of bankruptcy of the debtor, stipulated in the articles 9, 9-1, 27- 17, paragraph 1 of the article 27-18 of this Law, have been established.
2. The decision should contain following aspects:
• finding debtor bankrupt;
• setting bankruptcy process procedure;
• appointing an administrator.
3. A decision on recognition of an individual entrepreneur as bankrupt must contain instructions as to the termination of the registration of the debtor as an individual entrepreneur.
4. Any creditor, debtor, the state bankruptcy agency or the National Bank of the Kyrgyz Republic shall have the right to nominate an administrator.
5. Any person that meets requirements of this Law shall have the right of self nomination in front of the court.
6. Candidate for the administrator must meet the requirements set in the article 8 of this Law.
7. In absence of any nomination the court shall appoint the administrator.
8. In presence of several nominations the administrator shall be appointed through a competition. Terms, conditions and procedures for a competition shall be identified by the court in accordance with the requirements of this Law.
Article 27-22. Publication Of The Decision On Recognition Of The Debtor Bankrupt1. Notification of the recognition of the debtor bankrupt shall be published by the administrator within five calendar days after the decision has been made by the court at the expense of the debtor. These costs shall be referred to as the bankruptcy expenses. Same procedure shall apply to the publication of a notification on reversal of the court decision through the procedure of supervision.
2. Publication of the court decision on recognition of a debtor bankrupt shall contain:
• name and other data of the debtor, recognized as bankrupt;
• name of the court considering the case of bankruptcy of the debtor;
• date of the decision on recognition of the debtor bankrupt made by the court and appointment of the procedure of bankruptcy;
• period of time allocated for the presentation of claims of creditors, in accordance with this Law;
• data of the administrator.
3. The publication of a notification on reversal of the court decision through the procedure of supervision must contain the following:
• name and other data of the debtor, recognized as bankrupt;
• name of the court considering the case of bankruptcy of the debtor;
• date when the court has made a resolution on reversal of the decision on recognition of the debtor bankrupt made by the court and appointment of the procedure of bankruptcy.
Article 27-23. Decision Of The Court On Denial Of Recognition Of The Debtor Bankrupt1. Decision of the court on denial of recognition of the debtor bankrupt shall be made in case the court has not established the features of bankruptcy as stipulated in the 9, 9-1, 27-17, paragraph 1 of the article 27-18 of this Law.
2. Decision of the court on denial of recognition of the debtor bankrupt shall serve as the grounds for termination of any consequences of acceptance of the petition for recognition of the debtor bankrupt and (or) appointment of the temporary administrator.
3. T he debtor shall have the right to claim the compensation of losses caused through the submission of an unjustified petition for recognition of the debtor bankrupt. The issue of compensation of losses of the debtor shall be considered at the same session of the court which has denied recognition of the debtor bankrupt.
Article 27-24. Court's Decision Of Ending Bankruptcy Process Of Debtor1. Court shall decide to end bankruptcy case in the following cases:
a. Debtor has been found bankrupt in accordance with this law.
b. Presence of factious/fake bankruptcy.
2. Court's decision to end bankruptcy case shall constitute a legal basis for excluding debtor from the state register, if bankruptcy process resulted in liquidation of debtor (for legal entities).
3. If debtor has been recognized solvent as a result of bankruptcy process, court's decision to end bankruptcy case shall give the legal basis to a legal entity to continue its business activities (if stake holders agree).
4. An individual entrepreneur shall continue the activities in accordance with the article 122 of this Law.
Article 27-25. Suspending Proceedings In Bankruptcy Process1. Suspension of bankruptcy case, unless otherwise stipulated by this Law, means suspension of trial for indefinite period of time (depending on the duration of the event that prevent the case consideration).
2. The court shall suspend the bankruptcy process in case:
• It is impossible to examine the case until decision for different case has not been made or different issue considered in the constitutional, arbitration, civil, administrative or criminal court;
• It is impossible to examine the case until decision for different case has not been made or different issue considered the court of treaty or foreign court;
• If plaintiff and debtor have submitted a joint petition with a request to suspend the case.
• If debtor has agreed to satisfy plaintiff's claims to full (extent), after bankruptcy case has been initiated in compliance with the requirements of Article 27-26 of this law.
This list of grounds for suspending a case of bankruptcy is exhaustive and may not be extended by a decision of the court.
3. The court shall make a justified conclusion on the suspension of the process of bankruptcy which may not be appealed.
4. In case of suspension of the process of bankruptcy the court must appoint a temporary administrator by request of the petitioner in order to maintain the assets pending the final decision of the court.
Article 27-26. Satisfaction Of Claims Of The Creditor By The Debtor Or Another Person After The Petition Has Been Accepted By The Court1. The court shall have the right to suspend the proceedings in the case if the debtor has agreed to satisfy fully claims of the creditor after the petition to recognize the debtor bankrupt has been accepted by the court. The court shall make a decision on suspension of the proceedings.
2. In order to satisfy claims of the creditor the debtor shall have to take the following actions within 10 days after the court has made its decision, as mentioned in the paragraph 1 of this article:
• pay an amount sufficient to satisfy fully all claims of the creditor to the account of the court;
• pay all court expenses, including the state duty, to refund to the petitioner in accordance with the paragraph 3 of the article 27-5 of this Law and pay the reward to the temporary administrator (if applicable);
• publish a notification in mass media of its decision to repay debts to the creditor;
• send written notifications to all creditors that have claims in excess of 100 minimal salaries.
- All of the actions above may be taken by another person in lieu of the debtor.
3. The court shall satisfy the claims of creditors through the deposit at the account of the court in 10 days after the last notification has been published or sent, as mentioned in the paragraph of this article.
4. The court shall resume the proceedings of the case:
• if debtor fails to take the actions, stipulate din the paragraphs 1 and 2 of this article;
• if other creditor(s) have appealed to the court with their claims during the period of time, mentioned in the paragraph 3 of this article.
The court shall make a decision to resume the proceedings of the case which may not be appealed.
5. After the process has been resumed, any cash at the account of the bank shall be kept at the account pending the final decision on the essence of the case.
6. In case the court makes a decision to refuse to recognize the debtor bankrupt, the cash from the account shall be refunded to the debtor or the person that have made the deposit instead of the debtor.
7. In case the court makes a decision to recognize the debtor bankrupt and start a procedure of bankruptcy the cash shall be used to cover the cost of the process of bankruptcy and repay the claims of creditors.
Article 27-27. Postponing the case consideration.1. If case of bankruptcy may not be considered at a session of the court, including due to absence of any party to the case or process of arbitration, or due to the need to present additional evidence, the court shall have the right to postpone the case consideration.
2. Absence of a debtor or a representative of the debtor without a solid reason shall not serve as the grounds for postponing the case consideration.
3. Consideration of a case may be postponed for a period of time indicated in the article 27-16 of this law. The court shall make a decision to postpone the case consideration, indicating the time and the pl