FORMATION OF THE BANKRUPTCY PROCESS (BANKRUPTCY PROCEEDINGS) AND ITS DEVELOPMENT IN THE 1990s IN INDEPENDENT UKRAINE

Section "Law": Theory and history of Economic Law and Process

Abstract

The article is devoted to the formation and development of the competitive process in independent Ukraine, namely in the 90s of the twentieth century, during its economic downturn. The normative legal acts of that period, which regulated the insolvency relations and the corresponding Explanations of the Supreme Arbitration Court of Ukraine, are studied. It is emphasized that the first act of the competitive process of independent Ukraine — the Bankruptcy Law at 1992, proved to be very simple to solve the problems of insolvency of large industrial enterprises. The author accentuates that this law in its essence resembled the competitive process of the XIX century, where there was only a liquidation procedure. The lack of a full-fledged financial recovery procedure, traditional measures of the bankruptcy process, a professional arbitration manager and legal deadlines for the regulation of bankruptcy proceedings led to litigation and unjustified liquidation of strategic industrial enterprises for the state. It is argued that the purpose of the Explanations of the Supreme Arbitration Court of Ukraine dated 18.11.1998 was to increase the efficiency of the law itself, mitigate the negative consequences of its application, resolve problems of simultaneous settlement of commercial disputes in litigation with consideration of monetary claims of creditors in bankruptcy proceedings. The important points of this Clarification are emphasized concerning the application of procedural norms, the legal status of the participants in the case, the structure and content of the application for initiating bankruptcy proceedings, the functions of the court, the work of the liquidation commission, etc. It is noted that the Clarification not only facilitated the work of arbitration courts and participants in the bankruptcy proceedings, but also allowed to properly understand the essence of the bankruptcy process itself, previously unknown to the legal science of Ukraine. It is argued that the Bankruptcy Law at 1999 was of revolutionary significance for the development of the bankruptcy process in Ukraine. He significantly intensified the activities of arbitration courts. Significantly increased the number of bankruptcy cases initiated by debtors, including large industrial enterprises. In many cases, the courts began to apply reorganization and amicable agreement procedures. There are differences between the Bankruptcy Laws at 1992 and 1999, in particular in their direction. As a result of the study, the author concludes that the benefits provided by the Bankruptcy Law of 1999 could be used by debtors in respect of whom cases were initiated under the "old" version of the Law. The activities of arbitration managers allowed to maximize the efficiency of the bankruptcy procedure in terms of financial recovery of debtors and repayment of creditors’ claims.

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