THE UKRAINE INTRODUCES A MORATORIUM ON BANKRUPTCY DUE TO THE PANDEMIC

The Verkhovna Rada of Ukraine passed a draft law on the introduction of the moratorium on bankruptcy for the debtors of legal entities in the second reading.

The prohibition on the initiation of the bankruptcy cases will be valid during the period of quarantine introduced in the country, as well as within 90 days after its cancellation. However, not everyone will fall under the moratorium, but only those companies the debts of which arose after 1 February, 2020.

What is more, the draft law extends the period during which the debtor is obliged to file for bankruptcy in a situation where the satisfaction of several creditors’ claims might put him in a situation of impossibility to satisfy the claims of others.    

The law contains a rule on the suspension of interest on the monetary obligations to the creditors if such obligations have been restructured.

The concessions have also affected the arbitration managers, who can be exempted from responsibility if they are unable to fulfill their duties due to the quarantine introduced in the country.

Currently, quarantine has been extended by the Cabinet of Ministers of Ukraine until 31 July. According to the previous plan, the restriction regime was supposed to end on 22 June, but due to the ongoing difficult epidemiological situation in the country, it was extended.