Commercial Law Center, Ukraine / NEWSLETTER#7 March 2001

INSIDE THIS ISSUE:
The Way of Success: Experience of Financial Enhancement
Restructuring in Zaporizhzhya: New positive examples
Legislation NEWS
Donetsk Seminar “ The Law of Ukraine “On Restoration of Solvency of the Debtor or Declaring It Bankrupt” as a powerful means of assistance to Ukrainian businesses”
FRP News

Enterprise restructuring process is a complex, sometimes painful, but necessary stage in structural transformations in economy that will allow to resolve the financial problem of debt crisis that penetrated all spheres of Ukraine’s economy. The Priority areas of restructuring are efficient methods for restoration of solvency and normal operation of the debtor enterprises. Most often this is implemented through application of the Law of Ukraine “On Restoration of Solvency of the Debtor or Declaring It Bankrupt” that allows to satisfy the creditors’ claims and resume efficient operations.

According to preliminary results the study carried out by the State Committee for Statistics of Ukraine study in 2000, over 16% of large and medium Ukrainian enterprises are threatened with bankruptcy within the next 12 months. This problem is particularly acute for electric power and fuel sector and glass and porcelain manufacturers. The most frequently mentioned causes are growing prices of raw materials, sales problems and requirements of customers. These trends show that there is a potentially large group of enterprises that should be aware of advantages they can receive when correctly applying the law.

In this issue we keep to our tradition and would like to tell you of successful examples of restructuring at two different industrial enterprises. They chose the path of their further development using powerful mechanisms of solvency restoration provided by the new Law. Both enterprises concluded their proceedings by signing amicable settlement agreement. These and other prospects of completing restructuring are represented in this issue.

Legislation news section offers an analytical article on the Law “On Procedure for Paying Off the Taxpayers’ Obligations to the Budgets and the State Target Funds” that provoked a lively discussion in Ukrainian business press among professional experts, government officials and enterprise managers. This Law will be introduced by stages starting from February 20, 2001, some of its key articles are introduced staring from October, and the last stage will end on January 1, 2002. Without doubt, the Law on revocation of indisputable writing-off and kartoteka will have a significant impact on most Ukrainian enterprises and we will consider its main positive and negative points.

The story of OJSC Gorlovka Meat Plant could be started from the outline of events that prompted the enterprise to file a bankruptcy petition with Donetsk Oblast Arbitration Court.The old management was not able to readjust to the new economic situation and find the optimal pattern of behavior in these circumstances. As with many other Ukrainian businesses, this was caused by the absence of an efficient owner, and in the result the management was making decisions that were based on their personal interests and not always met the interests of the company. Disregard of market situation and negligent attitude to costs control brought an operating business to the brink of a precipice. The new owner, investment company Finansova Fortetsya [Financial Fortress], landed a “sumptuous” inheritance – a plant that was not used to fierce competition, employees that last saw they pay checks more than 9 months ago, and, on top of that, the debt of about UAH 4 ml. In these conditions that were threatening the existence of the business per se, the management were searching for the way out of crisis situation. It just happened that one of the plant’s managers was invited to the seminar organized by Deloitte Touche Tohmatsu Financial Restructuring Project in Ivano-Frankivsk. The seminar was held in December 1999 and was to explain provisions of the Law of Ukraine “On Restoration of Solvency of the Debtor or Declaring It Bankrupt” and to study the solvency restoration and restructuring tools. In early 2000 one of the plant’s commercial creditors, a foreign company whose claims totaled about USD 1665 thousand, took the most aggressive position. Executive proceedings were initiated on petition of this company, the state executive service [sheriff’s department] collected the available cash, the plant’s property was seized and was to be sold at an auction. If the claims of this creditor were satisfied there would be left nothing to satisfy the claims of the others, and the plant’s operations, which allowed it to earn some money, were paralyzed by the actions of the state executive service. In these circumstances the plant’s management decided to file a bankruptcy petition with the court to carry out sanation of the business. According to Vladislav Lukyanov, The Chairman of the plant’s Supervisory Board, it was quite uneasy to opt for such decision. The stereotype of bankruptcy that developed under the influence of the “old” Law “On Bankruptcy” in 1992-2000 and was associated with liquidation, made one shiver from the mere idea of filing for bankruptcy, let alone placing an official notice on initiation of proceedings.Under the new Law, “within one month the debtor shall file a bankruptcy petition with a court of arbitration in the event of the following circumstances: satisfaction of the claims of one or several creditors will make it impossible to satisfy the claims of other creditors in full”. Just because of this, as early as March 2000, the plants’ manager filed for bankruptcy under Article 53 – initiation of debtor-led bankruptcy proceedings that allow for sanation of an enterprise. The plant management was hoping to apply the mechanism of sanation that would allow restructuring of the debtor enterprise to restore its solvency. As we know, in the event of sanation the Law offers powerful tools for restoring a profitable business, e.g. return of assets that had been seized or transferred to interested parties to the detriment of the other creditors’ interests, change of the debt structure, possibility to defer the debt or pay it in installments on signing of an amicable settlement agreement. Of the difficulties was to agree the sanation plan with the debtors whose total claims exceeded 50%. After this Rubicon was crossed (with support of 57% of the creditors’ committee members), the court ruled to initiate bankruptcy proceedings. The court ruling introduced moratorium on satisfying the creditors’ claims property administration procedure and sanation for up to 12 months. The plant’s manager was appointed to serve as sanation manager. During the month that followed publication of the notice on initiation of proceedings the court received 14 petitions representing pecuniary claims. In total, the court allowed claims for the amount that represented about 80% of all payables. The formed creditors' committee had three friendly creditors in it, one neutral (the district STA), and the fifth, the same miserable foreign creditor, still had quite an unfriendly position. The sanation manager offered for consideration three alternative scenarios. The first provided for full repayment of the debt. According to expert opinion, this could be possible only after 20 years of uninterrupted profitable operation. The second scenario envisioned liquidation of the plant that will give the creditors 23% of their total claims. The creditors’ committee voted for the third option, amicable settlement agreement. The agreement provided for writing-off of tax debt and penalties of over 2 years old, and payment in installments of the debt that arose during the two years that preceded the proceedings. In addition, this amicable settlement agreement provided for exchange of the Class 4 creditors’ claims for the newly issued shares. At the last stage of preparation for signing the agreement, two of the creditors became opposed to it. One of them was the district STA, whose management was refusing to sign motivating this by absence of the infamous mechanism [regulations] for writing-off the tax debt and payment of it in installments. The other was a Class 4 creditor who objected to debt-for equity swap. The arbitration court had to consider these objections. The judge ruled that the arguments of both the STA and the Class 4 creditor were groundless and at variance with the Law. Thus, in early November the court approved the amicable settlement agreement and terminated bankruptcy proceedings against the plant.

Over the whole period FRP had been providing consultations and methodological support to the plant. These included legal advice regarding the progress of proceedings and consultations regarding amicable settlement agreement. Also, the plant’s employees were trained in enterprise solvency restoration and use of Corporate Restructuring Model that was contributed by the Project. At this moment, within a short time, the management went ahead with the plant restructuring: production was resumed, salaries payments to the creditors and current payments were paid on time according to the approved plan. Sanation prevented the stoppage of the plant, helped to keep its market position and restore solvency; payments to all creditors were made within prescribed time. Production increased by 40% in volume, and by 70% in value terms. Salaries are paid on time, and more than that, over the period of sanation the average salary went up from UAH 85 to UAH 220 per month. This enterprise needed less than a year to implement the progressive principles of the Law of Ukraine “On restoration of Solvency of the Debtor or Declaring It Bankrupt”. This successful example of application of the new Law allows to maintain that now Ukraine has the conditions for revival of domestic producers. Undoubtedly, the managers of the enterprises that got into the situation similar to the one described here will have to think about the future advantages they will receive if they take the active position of protecting the rights provided by the new Law. At the end of the day, to have a running business is good not only for its owners and employees, but also for the country overall. I would like to conclude with the words of Vladislav Lukyanov, President of Finansova Fortetsya that owns Gorlovka Meat Plant, from his interview to “Negotsiant” newspaper where he was giving advice to the enterprises that became insolvent. “The old Law is an economic subversion against Ukraine. It was like a guillotine: decapitation as a cure for headache. As to the new Law, it is very powerful. Its substance is more characteristic of the US judiciary system, and with correct approaches applied it allows for creative development of events. Of course, it is not flawless, but at the same tome allows to get rid of many problems. In most cases, an enterprise has already paid its debts, and penalties and interest are like a mill stone on its neck. If an investor comes to the enterprise that is overburdened with debt, my advice would be sanation. This is like a purgatory, from which one comes out without the old sins and can start afresh. But the specific conditions must be also taken into account”.

The Project continues to offer to the readers positive examples of efficient use of the Law of Ukraine

Once practitioners from Zaporizhzhya, who were trained by Dnipropetrovsk Training Center, were approached by Berdyansk Fiber Glass Plant, a well known enterprise in the area, with a request to provide assistance in application of this Law.

This state-owned enterprise inherited from the old times inefficient methods of management, which coupled with deterioration of overall economic situation in 1992-1998, had a negative impact on its finances. Disadvantageous contracts with suppliers, unreasonable sales policy, negligent attitudes to costs control – this is a far from being complete list of the reasons that brought the enterprise to insolvency.

In 1998, bankruptcy proceedings against the plant were initiated. It is worth reminding that the Law of Ukraine “On Bankruptcy” that was in force until 01.01.2000, and provided no alternatives for resolving such situation save for liquidation, which in many cases has a devastating effect to Ukraine’s economy.

The times have changed, and so has the management. As early as in 1999 the enterprise found and applied new modes of operation that allowed to give work to over 1 300 employees. A wide range of products that have a great demand in Ukraine and overseas – fiberglass mesh, fabrics, heat- and electrical insulating materials, semi-finished products for construction – allowed to find new markets. Today the enterprise does not keep any stock in the warehouse, shipping the products straight away to the customers, and makes payments in cash, avoiding any barter deals. The monthly sales have risen to over UAH 1 ml.

But the old debts remained a heavy burden for the enterprise. The payables were over UAH 10 ml, and almost half of it was the tax and duty debt.

In these conditions and with the advent of the new Law the enterprises decided to use a more progressive piece of legislation to apply the new mechanism of solvency restoration, namely debt restructuring through signing of amicable settlement agreement with its creditors.

For some time the local STA was against converting the case to the new Law motivating this by absence of the required mechanism [instructions or regulations]. The case was in a deadlock in spite of almost complete set of available documents needed for financial restructuring.

Active assistance of practitioners that were engaged by the enterprise at this stage allowed to prepare within a very short time the materials that were to change the attitude of the Pension Fund and the STA to this problem. (It should be noted that the debt to the Pension Fund was over UAH 1 800 thousand, and to the SAT – almost UAH 4 ml). Materials were prepared using Corporate Restructuring Model (CRM) that allows to compare the revenues to “the STA and other state agencies that control timeliness and correctness of payment of taxes and duties”, (The Law of Ukraine “ON Restoration of Solvency of the Debtor or Declaring It Bankrupt”) in the event of liquidation and sanation.

The calculations showed a higher efficiency of sanation of the enterprise. Thus, according to CRM, in the event of liquidation the SAT and the Pension Fund will receive not more than UAH 1.5 ml, or 26% of total owed, and amicable settlement agreement allows them to get over UAH 17 ml. These UAH 17 ml include repayment of a part of old tax and duty debts (and this is much more than what the state agencies would get in liquidation) and current payments that the enterprise will make over the next 6 years.

This argument gave additional backing to the amicable settlement agreement that was signed back in July 2000, which allows to write-off a part of the debt owed to the SAT and the Pension Fund, and most importantly, restructure (pay in installments) the remaining part for up to 6 years. Although for some time the STA was delaying signing of the agreement, the arbitration court ruled to approve it and the STA finally prepared the schedule for debt restructuring.

Therefore, Berdyansk Fiber Glass Plant can celebrate the victory of its solvency restoration, victory of common sense over old rules.

We acknowledge assistance of Mrs. O. Matveyava, Deputy Plant Director, in preparing this article.

On February 20, 2001 the Law of Ukraine “On Stimulating Development of Agriculture in 2001-2004” became effective. This Law defines the key elements of the national policy for the period of reform of the agricultural sector in 2001-2004 as a priority sector of national economy. Among other important points a special attention should be given to revocation of paragraph two clause 1 Section VII “Final Provisions” of the Law of Ukraine “On restoration of Solvency of the debtor or Declaring It Bankrupt" that said that “bankruptcy proceedings against agricultural enterprises shall not be initiated from the day of publication of this Law and till January 1, 2004”.

Therefore, bankruptcy proceedings against agricultural enterprises may be initiated as early as March 2001, which will increase the number of bankruptcy cases heard in Ukrainian arbitration courts.

The key points of the Law of Ukraine “On repayment of taxpayers’ obligations to the budgets and the state target funds”

On December 21, 2000, before the closing of the last session of its last session in the century, the Parliament passed the Law of Ukraine “On repayment of taxpayers’ obligations to the budgets and the state target funds” (hereinafter, the Law) that already started to come into effect. The Law, which is called the precursor of the Tax Code, has a complex history of passing through the national legislature, and already triggered a lot of discussions around it.

This is a special tax law that defines the procedure for repayment of obligations of legal entities and natural persons to the budgets and the state target funds regarding taxes and duties (obligatory payments), accrual an payment of penalties and interest that are applied to the taxpayers by controlling authorities, including for violations in foreign economic activity, and defines the procedure for appealing the actions of collection authorities.

This Law revokes indisputable collection of funds from the taxpayers’ bank accounts; effectively it revokes kartoteka No2, and introduces property liability for failure to pay taxes. In addition, it has legalized in Ukrainian law “indirect methods” of tax calculation, provisions on tax lien, introduced new provisions on tax seizure etc.

On February 23 this year Financial Restructuring Project (FRP) held an “internal” seminar to discuss the practical application of provisions of the Law “On repayment of taxpayers’ obligations to the budgets and the state target funds”. The main purpose of the seminar was the need for joint discussion on the impact of provisions of the mentioned Law on financial restructuring of pilot enterprises carried out by FRP, on the system of bankruptcy and efficiency of the Law “On Restoration of Solvency of the Debtor or declaring It Bankrupt”.

The Law comes into effect on April 1, 2001, and some of its provisions – somewhat later. Ironically, apart from being All Fools’ Day, this year it is a Sunday.

The Law’s provisions on writing-off the debt and payment of it in installments (Article 18) come into effect on the day of its publication, February 20, 2001.

Articles 6 “Tax notices and tax claims”, 8 “Tax lien”, 9 “Administrative seizure of assets”, 14 “Deferral and payment of tax obligations in installments” become effective on October 1, 2001.

Calculation of amount of tax obligations by indirect method and sale of assets subject to tax lien will start on January 1, 2002.

Preamble to the Law “On repayment of taxpayers’ obligations to the budgets and the state target funds” contains a provision that limits the effect of this Law in respect of the persons that are covered by the procedures of the “On Restoration of Solvency of the Debtor or Declaring It Bankrupt”(hereinafter, the Solvency restoration Law).

Article 8.7 of the Law of the Law on repayment defines that upon the moment of ruling of the court (court of arbitration) on initiation of bankruptcy proceedings against a taxpayer the procedure for payment of the tax obligation or repayment of the tax debt of such taxpayer stated in the petition filed with the court (court of arbitration) is defined in accordance with the Law of Ukraine “On Restoration of Solvency of the Debtor or Declaring It Bankrupt” without application of provisions of this Law.

Knowing that Article 18 of the Law “On repayment…” becomes effective before the provisions that limit application of this Law to the taxpayers against whom bankruptcy proceedings were initiated, the gradual charter of the Law becoming effective allows to assume that Article 18 of the Law may be applied to the enterprises taxpayers against whom bankruptcy proceedings were initiated.

Will Article 18 of the Law “On repayment of taxpayers’ obligations to the budgets and the state target funds” work?

The substance of this Article of the Law “on repayment…” that became effective on the moment of publication of this Law is in the following:

“kartoteka No2” is revoked;
it defines which additional debts, fines and penalties shall be written-off or paid in installments and on what conditions;
grounds for cancellation of agreement on payment of tax debt in installments by the STA;
definition of a bad tax debt that shall be written-off, etc.

As was said before, the difference in the dates when this Article and the Law become effective makes it possible, within the transitory period, to apply Article 18 and write-off and pay in installments the tax debt of the enterprises against which bankruptcy proceedings were initiated.

In pursuance of this Article the National Bank of Ukraine prepared and sent to the authorized banks its letter No25-111/408-1362 of 01.03.2001 “On execution of Article 18 of the Law of Ukraine “On repayment of taxpayers’ obligations to the budgets and the state target funds” where it draws attention of the banks to which tax debts shall be written-off, and which tax debt may be paid in installments. In addition, the banks are instructed that payment documents for payment of tax debt shall not be executed but “will be registered by banks until the special notice”.

It is obvious that this formulation was caused by the absence of a regulatory Act that would provide a more detailed procedure for implementation of this Law by the STA. It became known from unofficial sources that this document was prepared and is now being registered in Ministry of Justice.

Since the provisions of the Law “On repayment…” that limit application of this Law to the debtors against whom bankruptcy proceedings were initiated come into effect on April 1, 2001, this means after April 1, 2001 their “old” tax debts will not be written-off or allowed to be paid in installments pursuant to Article 18.

There is another side to this problem – from April 1 Ukrainian enterprises will have no incentive to restore their solvency through bankruptcy proceedings. Motivation of Ukrainian top managers is simple – they believe that under Article 18 the tax debt that arose before 31.12.1999 as well as penalties and interest will be written-off or restructured, whereas under Article 36.2 of the new Law “On Restoration of Solvency…” it is only tax debts that “arose three full calendar years before filing bankruptcy petition” that will be written-off (forgiven).

Undoubtedly, it is a positive pint that in the event of ambiguous interpretation of the rights and obligations of taxpayers or tax authorities (conflict of interest) in application of Article 18, decision of the STA within appeal settlement should be made in favor of the taxpayer ( 4.4.1 of the Law “On repayment…”).

Under the Law (Article 5) has the right to appeal decision of the STA within appeal settlement of a tax obligation, or in the court. IN this event a taxpayer also has the right to appeal “the final decision of the high (central) body of controlling authority” in the court of law.

The seminar participants recommended to make this process more transparent. For this purpose, the appellant and non-governmental organizations should be involved in the consideration of the filed appeal by the appeal authority. This will not only make the appeal process more transparent but will also prevent corruption.

It was also proposed to improve the appeal procedure through introduction of a 10-day term for the decision of the high (central) body of the controlling authority that determines the tax obligation to come into effect. If a taxpayer disagrees with such decision, he will have 10 days to appeal this decision in the court. If an appeal was not filed this means that the taxpayer agrees with the decision and it becomes effective.

Overall, being negative about Article 9 of the Law “On repayment…” as anti-constitutional, the seminar participants would like to draw attention to deficiency of some of its provisions.

In particular, quite “stillborn” looks the provision that says that seizure of assets may be applied if it becomes known that “the taxpayer, that received a tax notice or has a tax debt, was declared insolvent under obligations other than the tax ones except for the cases when moratorium was applied to such debtor due to initiation of bankruptcy proceedings against him.”

Firstly, the fact of insolvency is established by the court, and serves as one of the grounds for initiation of bankruptcy proceedings. Obviously, the lawmaker meant developing special methodologies for establishing the fact of insolvency.

Secondly, can the fact of application of administrative seizure of assets be made dependent on whether the taxpayer was found insolvent under obligations other than the tax ones?

Overall, the term “seizure” is already used in the Code of Administrative Offences, but in a different meaning and in regard of other persons. Administrative seizure in the Law is defined as “ an exclusive means of securing the possibility to repay … a tax debt”, which contradicts the already existing in the civil law means for securing debt (see Chapter 16, Civil Code). This method of influence on the taxpayer is very dangerous for business, since it can significantly limit the freedom of entrepreneurship.

The wisdom of Ukrainian MPs established grounds for creating of a new profession – “tax manager”. We should only hope that appropriate changes will be made to the Classifier of Professions since it is envisioned that a tax manager will be appointed from the officials of a tax authority.

Levying against a taxpayer’s property is based on a court decision, and compulsory execution of a court decision must be carried out exclusively by the state executive service [sheriff’s office]. Activity of the state executive service in terms of levying against property and sale of property is already sufficiently regulated by legislative acts (Civil Procedural Code, the Law of Ukraine “On Executive Proceedings”, etc) and does not require additional regulation by this Law.

Providing such additional powers to the STA is non-economic, anti-constitutional, and will lead to imbalance between the executive and the judiciary.

Opinion of the seminar participants was divided in regard of this innovation – the minority insisted that the tax compromise would become the ground for extortion and corruption if the SAT applies indirect methods. In two words, it will look like this: pay us something and we will leave you alone, or come to another settlement...

In the result of discussion the seminar participants agreed that the process of making a tax compromise should be made transparent and publicly open.

A tax compromise as an agreement between the indebted taxpayer and the STA should be both legitimate and controllable.

This way or another, the time should tell how efficient and transparent are the procedures of indirect methods for determining tax obligations and tax compromise.

One of the collisions of the Law “On Repayment …” is Article 14.4.3, which effectively means that payment in installments or deferral may not be granted for tax obligations under import duty, excise, value added tax in the event of import of goods or services on the customs territory of Ukraine, payments to the Pension Fund, or other state or mandatory insurance payments unless provided otherwise by the laws that regulate these taxes and duties, or by this Law.

The draft Law that the President submitted to the Verkhovna Rada should resolve this problem through revocation of writing-off of excise duty, personal income tax, the Pension Fund and Social Insurance Fund debt.

The procedure of deferral and payment of tax obligations in installments should be added with the procedure of appeal of decision of the STA denying a taxpayer payment of the tax obligations in installments or their deferral. The Law should also

provide for a possibility to order the head of an STA unit to make a decision in favor of the debtor.

This Law introduced in Ukrainian legislation the concept of tax lien and other means of securing tax obligations.

Before October 1, the tax lien will be regulated by the Presidential Edict No167/98 of March 4, 1998. On the pretext that such provisions exist in all civilized countries, the existing concept was adjusted to the narrow interests of the tax authorities.

The tax lien provisions were introduced without analysis of practice of application of the said Presidential Edict and its negative effects. Furthermore, the Law’s tax provisions contradict the practice that exists in majority of market economies, are not civilized and more characteristic of totalitarian regimes.

Firstly, to change the grounds for arising tax lien and give a more clear definition to collateral;

Secondly, to order the STA to register tax lien in the State Register of Pledged personal property;

Thirdly, to establish that preferential right to satisfaction of claims arises on the date of registration of tax lien, and not on the date the right to tax lien arises.

FRP continues to disseminate information on the Law and experience of its application with positive results achieved by the enterprises that were successfully using provisions of the Law. In particular, on February 12, 2000 the seminar “ The Law of Ukraine “On Restoration of Solvency of the Debtor or Declaring It Bankrupt” as a powerful means of assistance to Ukrainian businesses” was held in Donetsk. It should be noted that Donetsk oblast is the largest in Ukraine in terms of industrial production. The seminar was organized in conjunction with Investitsii i Consulting LLC related to Dicom, one of the oldest and largest Ukrainian investment companies. The seminar was the first in the number of events for transfer of accomplishments of FRP in solvency restoration to Ukrainian enterprises. The main idea is to transfer materials and methodology developed and tested by FRP over the last three years to the companies that will be provide their restructuring services on commercial basis. Another important component is development of solvency restoration and restructuring services market in the region. This task should be assisted by provision of comprehensive information on the opportunities provided by the Law to the users (debtor enterprises, creditors, arbitration mangers etc), and results that can be achieved with the help of the tools developed by FRP.

The Donetsk seminar was opened by a representative of Donetsk Oblast State Administration. Apart from the Oblast State Administration the seminar was also attended by a judge of Donetsk Arbitration Court, a representative of local branch of the Pension Fund, professors of Donetsk universities that deal with restructuring issues, journalists etc. Thanks to the seminar managers of almost 20 enterprises of Donetsk oblast and independent arbitration managers got a clear idea of advantages of the Law and tools developed by FRP, as well as learnt about specific examples of solvency restoration, including at Donetsk oblast enterprises.

The seminar and the issues covered at it received a great attention in the media of Donetsk oblast. After the seminar a number of enterprises expressed their interest in cooperating with Investitsii i Consulting LLC in solvency restoration and restructuring. FRP will continue providing methodological and consulting support to its client in enterprise solvency restoration.

Considering success of the Dniprepetrovsk seminar, FRP invites companies and organizations from all regions of Ukraine for co-operation in disseminating of positive experience in the use of the Law.

In March 2001 FRP opened the Kiev National Bankruptcy Training and Advisory Center. One of the main tasks of the newly created Center is organization of seminars and trainings for solvency restoration practitioners and arbitration managers. Also, an important element is provision of practical assistance and consultations on economic and legal issues related to application of the Law of Ukraine “On Restoration of Solvency of the Debtor or Declaring It Bankrupt”. In our next issues you will find more on the operation of the Center.

Ms Irina Yakovleva, an experienced FRP expert, was appointed Director of the Center. We wish her good luck in her work.