On January 19, 2011 the State Bankruptcy Department and the Commercial Law Center co-hosted a round table discussion “Prerequisites and Ways for Reforming Insolvency Legislation”. In attendance were academics and practitioners, judges and government officials, experts in the bankruptcy sphere, NGOs and mass media representatives.

It was held to review changes in the public policy and economic factors that necessitated the bankruptcy legislation reform; to analyze the current enforcement practice; and to discuss the Draft Law “On Amendments to the Law of Ukraine ‘On Restoring the Debtor’s Solvency or Recognizing it Bankrupt’”.

Mr. Oleksiy Voronko, deputy Director of the State Department on Bankruptcy Issues, opened the round-table discussion by informing that the current situation with bankruptcy regulation is unacceptable. According to the latest WB and IFC “Doing Business” Report, Ukraine holds 150 place (out of 183 countries assessed) by the “closing business” indicator. Therefore, the Government set the task to develop recommendations on improving regulation in this sphere, aimed, in particular, at shortening its duration, decreasing its cost and improving the bankruptcy proceedings effectiveness.

Findings of the analytical research «State Policy and Legislation in the Sphere of Insolvency Regulation in Ukraine». were presented by one of its authors, Mr. Olexander Paskhaver, Director of the Center for Economic Development. He presented the analysis of the current state of the Ukrainian economy. The analysis set the basis for bankruptcy procedures, which should be taken into account during the legal reform in this sphere. Mr. Paskhaver spoke about the factors to be considered in the first place, in particular: existence of favorable for creditors model of current legislation on bankruptcy, the need to reorient the legislation on businesses protection and optimization of the state involvement (minimal involvement of the state, preventing competition among government agencies) etc.

Ms. Valentyna Danishevska, CLC Director, presented main novellas of the Draft Law “On Amendments to the Law of Ukraine ‘On Restoring the Debtor’s Solvency or Recognizing it Bankrupt’’ The purpose of the Draft Law is to simplify and shorten the duration of the bankruptcy proceedings and to make them less costly. It would eliminate opportunities for debtors to take advantage of conflicting regulations in order to evade fulfilling their obligations. The document is meant to streamline bankruptcy proceedings, in particular, to establish clear timeframes for appealing court decisions; set up deadlines for selling the debtor’s property; promote regulation on holding auctions and enforcement of awarded contracts; ensure sales of property at the highest possible price; allow to fulfill obligations and to reduce abuses in this sphere. Special attention was paid to the change of the status of bankruptcy commissioners, in particular, to qualification requirements for entering into profession, random assignment of cases and insurance.

Mr. Evgen Kapinus, adviser to Vice Prime Minister – Minister of Social Policy Mr. Sergiy Tyhipko, expressed his support to the Draft Law.

For information: the Draft Law was developed by the Working Group set up under the Ministry of Economy Bankruptcy Department in order to implement the Presidential Programme of Economic Reform in Ukraine for 2010-2014 “Wealthy Society, Competitive Economy, Effective State”.

The round-table participants actively discussed the proposed draft law and provided a number of recommendations on its improvement. Participants’ recommendations will be taken into account in finalizing the new version of the bankruptcy law. Latest version of the draft law can be found at CLC website and will be updated regularly. All interested are invited to contribute.

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Presentation BANKR 2011-01-19.ppt	2927 Kb