Bankruptcy and Restructuring

Economic instability, disrupted logistics chains, loss of markets or excessive debt may threaten the survival of any enterprise. If your business is approaching insolvency, action must be immediate and strictly within the legal framework.

KAVCHUK & PARTNERS Law Office provides professional support for restructuring and bankruptcy procedures for legal entities (LLCs, private enterprises, joint-stock companies), as well as insolvency proceedings involving individuals and individual entrepreneurs. We help preserve assets, protect founders and executives from personal liability, and find a lawful way out of a debt crisis.

Stages and components of our service for businesses

The process of crisis debt resolution for an enterprise consists of four consecutive steps:

1. Crisis financial and legal audit (Consulting)

• Assessment of insolvency indicators: we evaluate the company’s balance-sheet structure, accounts payable and receivable, and identify risks of financial default.
• Transaction audit: we review agreements entered into by the company during the previous three years for risks of challenge by creditors or tax authorities.
• Protection of beneficiaries’ assets: we assess the risks of owners and directors being held subsidiarily or jointly liable for company debts and develop a protection plan.
• Selecting the scenario: we formulate the optimal strategy — voluntary out-of-court restructuring, use of the preventive restructuring procedure, or initiation of court bankruptcy proceedings.

2. Preventive and out-of-court business restructuring

• Launching preventive restructuring: we implement the European-style instrument for protecting a business where there is only a threat of insolvency.
• Moratorium on enforcement: we seek a court-imposed moratorium of up to six months, blocking creditor attempts to seize assets or freeze accounts while the company develops a recovery plan.
• Negotiations with the creditor pool: we prepare a Restructuring Plan and negotiate it with banks, financial institutions and suppliers, including extensions, waiver of penalties and fines, or debt-to-equity conversion.

3. Preparation for court bankruptcy proceedings

• Building the evidence package: we prepare a complete set of financial and business documents, an inventory of company assets and a register of creditors.
• Review of secured assets: we assess the status of mortgaged or pledged property to minimise losses during court proceedings.
• Filing with the court: we professionally prepare and file an application to open bankruptcy proceedings, whether on behalf of the debtor or a creditor seeking recovery.
• Appointment of an insolvency practitioner: we involve a vetted, independent property administrator/liquidator to ensure objective administration of the procedure.

4. Court proceedings: Rehabilitation or Liquidation

• Rehabilitation procedure: we support implementation of a court-approved solvency restoration plan, allowing the company to continue operating.
• Liquidation procedure: where recovery is impossible, we support the full liquidation cycle — from formation of the liquidation estate and sale of assets through transparent auctions to discharge of remaining debts in accordance with the procedure.
• Representation before the creditors’ committee: we protect the client’s interests at general meetings and meetings of the creditors’ committee and monitor the legality of actions by all participants.

What does your business receive as a result?

• Preservation of an operating business: an opportunity to restart the company and address toxic debt through rehabilitation or preventive restructuring.
• Full and lawful discharge of debts: following completion of the liquidation procedure, all unpaid debts owed to banks, counterparties and the tax authorities are deemed discharged and written off on the basis of a court decision.
• Protection for management and owners: reduction of risks related to allegations of fraudulent or deliberate bankruptcy and protection of the personal assets of directors and founders.
• Removal of all restrictions: lifting of seizures from accounts, real estate and production facilities of the enterprise immediately after the court proceedings are opened.