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LAW OF UKRAINE

of September 19, 2024 No. 3985-IX

About introduction of amendments to the Code of Ukraine on insolvency proceedings and some other legal acts of Ukraine concerning implementation of the Directive of the European parliament and the Council of the European Union 2019/1023 and introductions of procedures of preventive restructuring

The Verkhovna Rada of Ukraine decides:

I. Make changes to such legal acts of Ukraine:

1. In the Economic Procedure Code of Ukraine (The sheet of the Verkhovna Rada of Ukraine, 2017, No. 48, the Art. 436):

Article 3 part one after words "of this Code" to add 1) with words of "The code of Ukraine on insolvency proceedings", and" to exclude words of "the Law of Ukraine "On recovery of solvency of the debtor or recognition by his bankrupt;

2) in article 12 part six after the word "bankruptcy" to add with the word "(insolvency)", and "the Law of Ukraine "On recovery of solvency of the debtor or recognition by his bankrupt" shall be replaced with words words "The code of Ukraine on insolvency proceedings";

Items 8 and 9 of part one of Article 20 to state 3) in the following edition:

"8) cases on bankruptcy (insolvency) and cases in disputes with property requirements to the debtor concerning which proceeedings about bankruptcy (insolvency), including cases in disputes on recognition invalid any bargains (agreements) concluded by the debtor are open; collection of the salary; recovery at work official and officials of the debtor;

9) cases on the procedure of preventive restructuring";

Part the fifth Article 41 to state 4) in the following edition:

"5. In cases on bankruptcy (insolvency) the list of participants of case is determined by the Code of Ukraine by insolvency proceedings";

Part the seventh Article 137 to add 5) with Item 3-1 of the following content:

"3-1) property attachment of the debtor after opening of proceeedings about bankruptcy (insolvency) of the debtor, except cases and according to the procedure, provided by the Code of Ukraine on insolvency proceedings";

Item 2 parts two of Article 186 to state 6) in the following edition:

"2) in the procedure of preventive restructuring";

"The law of Ukraine "On recovery of solvency of the debtor or recognition by his bankrupt" shall be replaced with words 7) in part five of Article 232 of the word "The code of Ukraine on insolvency proceedings";

8) in part one of Article 235 of the word "the Law of Ukraine "On recovery of solvency of the debtor or recognition by his bankrupt" shall be replaced with words "The code of Ukraine on insolvency proceedings";

9) in Article 247 part four:

add Item 1 with the word "(insolvency)";

state Item 2 in the following edition:

"2) concerning the procedure of preventive restructuring";

10) in Article 255:

in Item "the Law of Ukraine "On recovery of solvency of the debtor or recognition by his bankrupt" shall be replaced with words 17 parts of the first word "The code of Ukraine on insolvency proceedings";

in word part two of "the Law of Ukraine "On recovery of solvency of the debtor or recognition by his bankrupt" shall be replaced with words "the code of Ukraine on insolvency proceedings";

11) part third of Article 271 after the word "bankruptcy" to add with the word "(insolvency)";

"The law of Ukraine "On recovery of solvency of the debtor or recognition by his bankrupt" shall be replaced with words 12) in part three of Article 273 of the word "The code of Ukraine on insolvency proceedings";

"The law of Ukraine "On recovery of solvency of the debtor or recognition by his bankrupt" shall be replaced with words 13) in item 4 of part one of Article 287 of the word "The code of Ukraine on insolvency proceedings";

"The law of Ukraine "On recovery of solvency of the debtor or recognition by his bankrupt" shall be replaced with words 14) in part one of Article 320 of the word "The code of Ukraine on insolvency proceedings".

2. Article 150 of the Code of civil procedure of Ukraine (2017, No. 48, the Art. 436) after part twelve to add sheets of the Verkhovna Rada of Ukraine with new part of the following content:

"13. Providing the claim by property attachment of the debtor after opening of proceeedings about bankruptcy (insolvency) of the debtor, except cases and according to the procedure, provided by the Code of Ukraine on insolvency proceedings is not allowed".

With respect thereto the thirteenth and fourteenth to consider parts respectively parts fourteen and the fifteenth.

3. In the Code of Ukraine on insolvency proceedings (To the sheet of the Verkhovna Rada of Ukraine, 2019, No. 19, the Art. 74):

1) in Article 1:

in part one:

the sixth and eighteenth to state paragraphs in the following edition:

"interested persons concerning the debtor - the legal entity created with the assistance of the debtor, the legal entity performing or within the last three years exercising control over the debtor, legal entity or physical person over which exercises control or within the last three years were performed by the debtor, the legal entity with whom the debtor is or within the last three years was under control of the third party, owners (participants, shareholders) of the debtor, the head of the debtor, persons who are part of governing bodies of the debtor, the chief accountant (accountant) of the debtor including are discharged from office in three years prior to opening of proceeedings about bankruptcy; persons with whom or for benefit of which the debtor made transactions on property acquisition of the debtor which do not correspond to criteria of rationality (economic feasibility, availability of the business purpose) and conscientiousness; the party of the fraudatorny transaction made by the debtor or transactions which according to Article 42 of this Code is recognized as invalid; and also the faces consisting in the related relations with specified persons and the physical person - the debtor, namely: spouses and their children, parents, brothers, sisters, grandsons, and also other persons concerning whom there are reasonable bases to consider them interested. For the purposes of of this Code interested persons concerning the arbitration manager or creditors persons are recognized the same value, as well as interested persons concerning the debtor. The creditor is interested in the debtor's relation also if he within six months before date of opening of proceeedings about bankruptcy (insolvency) or procedures of preventive restructuring directly or indirectly acquired the right to claim against the debtor from the creditor interested in the debtor's relation";

"the employee representative of the debtor person, authorized by general meeting (conference) at which there are at least a half of the number of staff of workers of the debtor, or the relevant decision of primary trade-union organization of the debtor (in the presence of several primary organizations - their common decision) to represent the interests of workers of the debtor during proceeedings about bankruptcy with the right of advisory vote or in the procedure of preventive restructuring";

add taking into account alphabetic procedure with terms of the following content:

"the administrator of preventive restructuring - the arbitration manager appointed by economic court for implementation of the procedure of preventive restructuring";

"threat неплатежеспособности-финансово-хозяйственное the debtor's condition which is characterized by availability of circumstances, confirmatory that the debtor within the next 12 months will not be able to fulfill the monetary commitments in time provided for their accomplishment or to make payments on regular economic activities";

"the attracted creditors creditors in the procedure of preventive restructuring including provided with pledge of property of the debtor whose requirements, the rights and interests directly change the plan of preventive restructuring";

"the best interests of creditors criteria in the procedure of preventive restructuring which means that any attracted creditor will not fall into the worst state concerning the size and/or the term of satisfaction of the requirements according to the plan of preventive restructuring, than in case of satisfaction of its requirements in the liquidating procedure within case on bankruptcy or in case of the best alternative scenario if the plan of preventive restructuring is rejected by court";

"new financing loan, the credit or other financial aid provided to the debtor by the existing or new creditor in the procedure of preventive restructuring which is provided by the plan of preventive restructuring approved by court and is intended for implementation of this plan";

"preventive restructuring system of the organizational and economic, managerial, investment, technical, financial and economic, legal measures directed to non-admission or prevention of insolvency of the debtor which can include change of structure, conditions or structure of assets and liabilities of the debtor, and also any necessary operational changes or combination of these elements which are performed according to the plan of preventive restructuring";

"intermediate financing - financial aid to the debtor (loan, the credit), guarantee of execution by the debtor of obligations, etc. which provides functioning of the debtor before approval of the plan of preventive restructuring by economic court and is necessary for continuation of activities of the debtor (conducting regular economic activity) or for preserving or value addition of assets of the debtor";

"sanitation system of the measures provided by this Code, performed during proceeedings about bankruptcy for the purpose of recovery of solvency of the debtor, directed to improvement of financial and economic condition of the debtor, and also satisfaction in full or partially requirements of creditors";

"the authorized person of founders (participants, shareholders) of the debtor person authorized by the supreme body of management of the debtor to represent the interests of founders during proceeedings about bankruptcy with the right of advisory vote or in the procedure of preventive restructuring";

add with part six of the following content:

"The terms "subjects of microentrepreneurship" and "small business entities" are used in this Code in the values given in the Economic code of Ukraine";

Article 2 to add 2) with part eight of the following content:

"8. Changes can be made to this Code only by the laws on introduction of amendments to the Code of Ukraine on insolvency proceedings";

Article 3 to add 3) with parts of the second or fourth of the following content:

"2. State body concerning bankruptcy in the field of prevention of insolvency:

provides forming and realizes state policy in the field of prevention of insolvency of debtors, including persons to whom procedures of preventive restructuring are applied;

provides placement on the website of state body concerning bankruptcy of information on instruments of early detection of insolvency and the procedure of preventive restructuring;

determines and approves standard form of the plan of preventive restructuring for subjects of microentrepreneurship and small business entities;

determines procedure and terms of representation by the debtor concerning which the procedure of preventive restructuring, or the administrator of preventive restructuring (in case of its appointment as court) information necessary for placement on the website of state body concerning bankruptcy is performed;

develops and approves standard documents on holding procedure of preventive restructuring, methodical recommendations;

approves standard form of the contract with the administrator of preventive restructuring;

performs other powers provided by the law.

3. The following information on prevention of insolvency is posted on the website of state body on bankruptcy:

about available tools of early warning system about insolvency;

about the procedures and measures concerning preventive restructuring;

the information materials, methodical recommendations and the control list of conditions for preparation of plans of preventive restructuring adapted for requirements and specifics of microentrepreneurship and small business which will be promulgated in Ukrainian and English or other official language of the European Union.

4. The state body concerning bankruptcy provides on annual basis collection, generalization and placement on the website of statistical information on procedures of preventive restructuring, bankruptcy and insolvency of physical person. The procedure for information collection is determined by state body concerning bankruptcy";

Article 4 to state 4) in the following edition:

"Article 4. Measures for prevention of insolvency of the debtor

1. The executive body of the debtor, and concerning the state and utility companies also body, authorized to manage property of the debtor, within the powers shall reveal and take timely measures for prevention and reaction in case of approach of insolvency of the debtor.

2. If the auditor, the accountant rendering services to the debtor, or the debtor's accountant by results of creation of tax statements reveal signs of insolvency or its threat, such persons within 10 days report about it to the debtor.

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