REPUBLIC OF LITHUANIA
laW ON RESTRUCTURING OF ENTERPRISES
20 March 2001 – No IX-218
(As last amended on 22 December 2011 – No XI-1873)
Vilnius
CHAPTER ONE
GENERAL PROVISIONS
Article 1. Purpose and Scope of the Law
2. The purpose of this Law shall be to provide conditions for legal persons in financial difficulties which have not discontinued their economic and commercial activities to maintain and develop these activities, to settle their debts and to avert bankruptcy.
3. The Law shall apply to all legal persons under restructuring, which are registered in the manner prescribed by legal acts of the Republic of Lithuania (hereinafter referred to as “enterprises”), except for the cases specified in paragraph 4 of this Article and other laws.
4. The Law shall not apply to budgetary institutions, political parties, trade unions, religious communities and associations, credit institutions, payment institutions, electronic money institutions, insurance and reinsurance companies, management companies, investment companies with variable capital, closed-ended investment companies and intermediaries of public trading in securities.
5. In the course of restructuring, the provisions regulating the activities of an enterprise, waiver of creditors’ claims or part thereof, postponement of the time limits for the discharge of obligations, making of compulsory payments shall apply to the extent this Law does not provide otherwise.
6. This Law shall apply to the extent it does not contradict the Law of the Republic of Lithuania on Financial Collateral Arrangements and the Law of the Republic of Lithuania on Settlement Finality in Payment and Securities Settlement Systems.
7. The purpose of this Law shall be to ensure the application of the legal act of the European Union indicated in the Annex to this Law.
Article 2. Definitions
1. “Enterprise in financial difficulties” means an enterprise unable to discharge its obligations and reduce losses which, without assistance rendered by creditors, would force it to terminate its activities and go bankrupt.
2. “Creditor’s claims secured by pledge and/or mortgage” means a creditor’s (holder’s of the pledge, mortgage provider’s) claims secured under a mortgage (pledge) transaction or on the basis of judicial pledge (hypothec) and in the event of failure to meet whereof the creditor of an enterprise (holder of the pledge, mortgage provider) shall have the right to demand, in accordance with the procedure laid down by this Law, the sale of the pledged assets and satisfaction of his claims from the proceeds of the sale first.
3. “Restructuring of an enterprise” means the totality of procedures established by this Law which aim to maintain and develop the activities of an enterprise, settle its debts and avert bankruptcy through securing assistance of the creditors of the enterprise and application of economic, technical, organisational and other measures.
4. “Enterprise restructuring administrator qualification exam” (hereinafter referred to as the “qualification exam”) means the test of knowledge of a natural person seeking to acquire the right to provide enterprise restructuring administration services, based on the programmes approved by the Commission on Attestation of Bankruptcy and Restructuring Administrators (hereinafter referred to as the “Commission”).
5. “Enterprise restructuring administrator certificate” means a document issued by the Ministry of Economy attesting to the qualification of a restructuring administrator.
6. “List of persons providing enterprise restructuring administration services” (hereinafter referred to as the “List”) means a list drawn up by the Government of the Republic of Lithuania or an institution authorized by it which includes legal persons established in the Republic of Lithuania and divisions (branches) (hereinafter referred to as “legal persons”) of legal persons of Member States registered in the Republic of Lithuania, entitled to provide enterprise restructuring administration services, as well as natural persons in possession of a restructuring administrator certificate. The right to provide enterprise restructuring administration services shall be acquired from the date of entry on the List.
7. “Enterprise restructuring proceedings” means a civil case before the court regarding the legal relations arising from restructuring of an enterprise.
8. Compulsory payments means taxes, charges and fees provided for by tax laws of the Republic of Lithuania.
9. “Current payments of an enterprise under restructuring” (hereinafter referred to as “current payments”) means all the payments and fees necessary for ensuring the economic and commercial activities of an enterprise, including compulsory payments, made during restructuring of an enterprise, starting from the date of coming into effect of the court ruling to initiate restructuring proceedings.
10. “Member State” means a European Union Member State or a State of the European Economic Area (EEA).
Article 3. Creditors of an Enterprise
Creditors of an enterprise (hereinafter referred to as “creditors”) shall mean natural and legal persons entitled to request from the enterprise the discharge of its obligations and liabilities, as well as natural and legal persons for whom the time limits for the discharge of liabilities have not yet expired:
1) in the event of non-payment of compulsory payments – state institutions which have an obligation to collect them;
2) in the event of non-payment of salary and compensation for damage arising from employment relations – employees of the enterprise (successors thereof);
3) in the event of transfer of the obligation to compensate for damage due to accidents at work or contraction of an occupational disease to the State in the cases specified in the Provisional Law of the Republic of Lithuania on Damage Compensation in Accident at Work or Occupational Disease Cases – an institution authorized by the Government of the Republic of Lithuania;
4) in the event of non-repayment of loans granted from the funds borrowed on behalf of the State and loans granted with the State guarantee – the Ministry of Finance of the Republic of Lithuania or an institution administering the loan;
6) in the event of non-repayment of assistance granted from the EU funds – state institutions administering the EU funds;
Article 4. Conditions for Restructuring
Restructuring may be initiated where:
1) an enterprise is in financial difficulties or there is a real possibility that it will be in financial difficulties within the next three months;
4) an enterprise was established at least three years before the date of filing of a petition to initiate enterprise restructuring proceedings;
Article 5. Guidelines of an Enterprise Restructuring Plan
1. The single-person or collegial management body (hereinafter referred to as the “management body”) of an enterprise complying with the provisions of Article 4 of this Law and seeking the initiation of its restructuring must prepare the guidelines of an enterprise restructuring plan (hereinafter referred to as the “guidelines”). The guidelines shall specify:
1) a short description of the current situation of the enterprise (the nature of activities, assets held and number of employees);
3) a list of creditors indicating: where the creditor is a natural person – the name, surname and address of the place of residence of the creditor; where the creditor is a legal person – the name and address of the registered office and/or place of operations; the amounts of claims, the time limits for the settlement thereof and measures of securing thereof;
4) suretyship, guarantees and other measures of securing the discharge of obligations which the enterprise has granted to third parties (with indication of the third parties and persons to whom credits have been granted by third parties: in case of a natural person – the name, surname and address of the place of residence; in case of a legal person – the name, code and address of the registered office and/or place of operations; the amounts of credits granted to third parties and the amounts of suretyship, guarantees and other measures of securing the discharge of obligations);
5) information relating to the cases in which financial claims have been entered against the enterprise;
6) voluntary commitments of the enterprise to pay interest to creditors for the period from the date of coming into effect of the court ruling to initiate restructuring proceedings to the date of coming into effect of the court ruling to approve the enterprise restructuring plan (hereinafter referred to as the “restructuring plan”);
7) a preliminary business plan of the enterprise, providing for the measures specified in paragraph 2 of Article 12 of this Law;
8) an estimate of administrative expenses, including the amount of remuneration for the restructuring administrator, for the period from the date of coming into effect of the court ruling to initiate the enterprise restructuring proceedings to the date of coming into effect of the court ruling to approve the restructuring plan.
2. The guidelines may also include other information, likely to be of importance when initiating enterprise restructuring proceedings, relating to the current situation of the enterprise and the reasons behind the enterprise’s financial difficulties.
3. The guidelines shall be approved by the meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise. The meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise shall adopt the decision specified in this paragraph in accordance with the decision-making procedure laid down in the law regulating the legal form of an appropriate legal person, and where such a law does not provide for this procedure – by 2/3 of votes of the participants of the enterprise present at the meeting.
Article 6. Petition to the Court on Initiation of Enterprise Restructuring Proceedings
1. Upon approving the guidelines, the meeting of participants of an enterprise or the owner thereof complying with the provisions of Article 4 of this Law or an institution exercising the rights and duties of the owner of a state or municipal enterprise shall endorse the candidate to the post of a restructuring administrator, proposed by the management body of the enterprise, and shall adopt a decision to apply to court for initiation of the enterprise restructuring proceedings. The meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise shall adopt the decision specified in this paragraph in accordance with the decision-making procedure laid down in the law regulating the legal form of an appropriate legal person, and where such a law does not provide for this procedure – by 2/3 of votes of the participants of the enterprise present at the meeting.
2. The management body of an enterprise shall, not later than within five working days of the date of adoption of the decision referred to in paragraph 1 of this Article:
1) notify in writing each creditor, persons to whom the enterprise has secured the proper discharge of its own or third parties’ liabilities through suretyship, guarantees or other measures of securing the discharge of obligations, as well as persons who have provided guarantees or other measures of securing the discharge of obligations for the enterprise, and the institution authorized by the Government of the Republic of Lithuania specified in paragraph 3 of Article 15 of this Law, of the adoption of the decision specified in paragraph 1 of this Article, and send the copies of the documents specified in subparagraph 2 of paragraph 4 of this Article to the creditors and the institution authorized by the Government of the Republic of Lithuania specified in paragraph 3 of Article 15 of this Law;
3. The petition to the court shall specify the reasons due to which the initiation of the enterprise restructuring proceedings is sought, shall name the candidate to the post of a restructuring administrator, and shall indicate: where the restructuring administrator is a natural person – the name, surname, number of a restructuring administrator certificate and the date of its issue, the address of the office and contact information; where the restructuring administrator is a legal person – the name of the legal person, the code of the legal person, the number on the List and the date of entry therein, the address of the registered office and contact information.
4. The petition on initiation of the enterprise restructuring proceedings shall be accompanied by the following:
2) the guidelines and the decision on approval of the guidelines by the meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise;
3) a copy of the set of financial statements for the previous financial year and a copy of the balance-sheet and profit (loss) statement for the period of the reporting financial year before the date of adoption by the meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise of the decision specified in paragraph 3 of Article 5 of this Law;
4) the consent of the restructuring administrator to perform enterprise restructuring procedures, which must indicate that he complies with the requirements of paragraph 2 of Article 21 of this Law and there are no obstacles established by other legal acts to prevent him from performing the enterprise restructuring procedures;
5) lists of bailiffs to whom writs of execution have been presented in relation to recovery from the enterprise or in relation to seizure of its assets, as well as lists of execution proceedings and courts examining the cases in which financial claims have been entered against the enterprise;
6) a list of seized bank accounts of the enterprise, specifying the account numbers and the particulars of the credit institutions in which the accounts have been opened;
Article 7. Initiation of Enterprise Restructuring Proceedings in Court
1. Upon receiving a petition to initiate enterprise restructuring proceedings, the court may:
1) put the management bodies of the enterprise, the chief accountant (accountant), the head of a structural division in charge of keeping of accounts or the head of an enterprise providing accounting services under an obligation to file with the court additional documents necessary for examination of the restructuring case;
2) summon to appear in court the participants of the enterprise, the owner thereof or representatives of an institution exercising the rights and duties of the owner of a state or municipal enterprise, members of the management bodies of the enterprise, the chief accountant (accountant) or the head of a structural division in charge of keeping of accounts or the head of an enterprise providing accounting services and other responsible employees, request written explanations relating to initiation of the restructuring proceedings;
2. The court shall adopt a ruling regarding the receipt of the petition on initiation of the enterprise restructuring proceedings. The court ruling regarding the receipt of the petition on initiation of the enterprise restructuring proceedings shall not be subject to appeal. The court shall, not later than on the next working day following the date of issuing the ruling in relation to the petition on initiation of the enterprise restructuring proceedings, send a copy of this ruling to the enterprise, the institution authorised by the Government of the Republic of Lithuania specified in paragraph 3 of Article 15 of this Law, bailiffs specified in subparagraph 5 of paragraph 4 of Article 6 of this Law, the manager of the Register of Legal Entities and shall publish the information on the issuing of the ruling in relation to the petition on initiation of the enterprise restructuring proceedings on a special website. Where decisions have been taken in relation to the enterprise by the court and other institutions and writs of execution have been issued based thereon, upon the court ruling regarding the receipt of the petition on initiation of the enterprise restructuring proceedings, the assets (funds) held by the enterprise may be seized under these writs of execution, however the sale and/or recovery of these assets shall be suspended from the date of adoption of the court ruling regarding the receipt of the petition on initiation of the enterprise restructuring proceedings. In the event that the bank accounts of the enterprises have been seized or are subject to other disposal restrictions, in its ruling regarding the receipt of the petition on initiation of the enterprise restructuring proceedings, the court must indicate that all the payments and fees necessary for ensuring the economic and commercial activities of the enterprise, including compulsory payments, irrespective of whether the accounts have been seized or are subject to other disposal restrictions, may be made from one or several specific accounts. Where it is specified that the payments be made from a seized account, the court ruling shall be forthwith sent to the Register of Property Seizure Acts.
3. The court shall, not later than within one month from the date of adoption of the ruling regarding the receipt of the petition on initiation of the enterprise restructuring proceedings, adopt a ruling to initiate the enterprise restructuring proceedings or to refuse to initiate the proceedings. The court shall be entitled, for important reasons, to extend the time limit of preparation for examination of the enterprise restructuring case in court, but no longer than for one month. Where, in preparation for the examination of the case, the court decides to convene a preliminary sitting, such a meeting may only be held once. When instructing to convene a preliminary sitting, the court must comply with the time limits for adoption of the ruling to initiate the enterprise restructuring proceedings or to refuse to initiate the proceedings specified in this paragraph.
4. The enterprise restructuring proceedings shall be initiated where the court establishes that the enterprise complies with the conditions specified in Article 4 of this Law and the requirements of Article 5 of this Law have not been violated.
5. The court shall adopt a ruling to refuse to initiate the enterprise restructuring proceedings where:
1) in the course of examination of the petition, the court makes a reasoned conclusion that the enterprise does not comply with at least one of the conditions specified in Article 4 of this Law;
2) the requirements specified in Article 5 and subparagraph 1 of paragraph 2 of Article 6 of this Law have been violated;
3) in the course of examination of the petition, the court makes a reasoned conclusion that the enterprise is insolvent and where there are other conditions to initiate bankruptcy proceedings as specified in the Republic of Lithuania Enterprise Bankruptcy Law, a petition on initiation of the bankruptcy proceedings must be filed with the court in accordance with the procedure established by the Republic of Lithuania Enterprise Bankruptcy Law.
6. The ruling on initiation of the enterprise restructuring proceedings or refusal to initiate the proceedings shall become effective within seven days from the date of adoption thereof unless an appeal has been filed. The ruling on the initiation of the enterprise restructuring proceedings is to be executed without delay, appealing against the ruling shall not suspend the enterprise restructuring. Where the court refuses to initiate the enterprise restructuring proceedings, the recovery and sale of the assets shall be renewed, and the provisional protection measures applied and other instructions adopted by the ruling regarding the receipt of the petition on initiation of the enterprise restructuring proceedings shall be repealed.
7. The enterprise restructuring proceedings shall be initiated and examined by contentious procedure in accordance with the procedure set forth by the Code of Civil Procedure of the Republic of Lithuania, except where this Law provides otherwise.
8. The ruling on initiation of the enterprise restructuring proceedings shall indicate:
1) the name, address of the registered office and code of the enterprise in respect of which the restructuring proceedings are initiated;
2) the appointed restructuring administrator: where the restructuring administrator is a natural person – the name, surname, number of the restructuring administrator certificate and the date of its issue, the address of the office and contact information; where the restructuring administrator is a legal person – the name of the legal person, the code of the legal person, the number on the List and the date of entry therein, the address of the registered office and contact information;
3) a period of time, of at least 30 calendar days but not exceeding 45 calendar days from the date of entry into force of the court ruling on initiation of the enterprise restructuring proceedings, during which creditors have the right to put forward their claims which arose before the date of initiation of the enterprise restructuring proceedings;
4) an estimate of administrative expenses, including the amount of remuneration for the restructuring administrator, for the period from the date of coming into effect of the court ruling to initiate the enterprise restructuring proceedings to the date of coming into effect of the court ruling to approve the enterprise restructuring plan (hereinafter referred to as the “restructuring plan”);
6) the accounts of the enterprise which may be used for making current payments and the payments specified in subparagraph 6 of paragraph 1 of Article 5 of this Law irrespective of whether the accounts have been seized or are subject to other restrictions on the disposal thereof;
9. Where the enterprise restructuring proceedings are initiated while a petition on initiation of bankruptcy proceedings is being examined in court but a court ruling on the initiation of bankruptcy proceedings has not yet been adopted, the petition on initiation of the bankruptcy proceedings shall not be examined.
10. An enterprise shall acquire the status of an enterprise under restructuring from the coming into effect of the court ruling to initiate the enterprise restructuring proceedings. The status of an enterprise under restructuring and the date of acquiring thereof shall be the data of the Register of Legal Entities.
11. Upon coming into effect of the ruling to initiate the enterprise restructuring proceedings, the court shall, not later than on the next working day, send a notification of the initiation of the enterprise restructuring proceedings and a copy of the court ruling to:
4) the bailiffs to whom writs of execution have been presented in relation to recovery from this enterprise or in relation to seizure of its assets;
5) other courts examining the cases in which financial claims have been entered against the enterprise;
12. Upon receiving the notification specified in paragraph 11 of this Article, the restructuring administrator shall, not later than within three working days, inform about the initiation of the enterprise restructuring proceedings the following:
1) creditors, persons to whom the enterprise has secured the proper discharge of its own or third parties’ liabilities through suretyship, guarantees or other measures of securing the discharge of obligations, as well as persons who have provided guarantees or other measures of securing the discharge of obligations for the enterprise;
2) all persons who have leased, borrowed or have the assets of the enterprise in custody or use or manage them on other grounds;
5) the meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of the state or municipal enterprise;
6) the administration of the municipality in the territory whereof the registered office of the enterprise under restructuring is located;
7) the Bank of Lithuania, where the enterprise restructuring proceedings have been initiated in respect of an enterprise included, in accordance with the procedure laid down by the Law of the Republic of Lithuania on Settlement Finality in Payment and Securities Settlement Systems, in the public list of participants of the systems, also where the enterprise restructuring proceedings have been initiated in respect of a public limited liability company considered to be an issuer of securities under the Law of the Republic of Lithuania on Securities;
8) the Ministry of Finance of the Republic of Lithuania or an institution administering the loan, where the enterprise restructuring proceedings have been initiated in respect of an enterprise which is the recipient of a loan borrowed on behalf of the State or a loan with the State guarantee;
13. A court ruling to initiate the enterprise restructuring proceedings or to refuse to initiate the enterprise restructuring proceedings may be appealed against by filing a separate appeal. The separate appeal against the ruling to initiate the enterprise restructuring proceedings or to refuse to initiate the enterprise restructuring proceedings must be examined in the Court of Appeal of Lithuania not later than within 14 working days from the date of its receipt. Statements in response to separate appeals may be filed within 10 working days from the date of dispatch of a copy of the separate appeal to the parties involved in the proceedings. Upon reversing the ruling to refuse to initiate the enterprise restructuring proceedings, the Court of Appeal of Lithuania may not adopt a ruling to initiate the proceedings, but it may refer the case back to the Court of First Instance for a new consideration. The ruling of the Court of Appeal of Lithuania shall be final and not subject to appeal.
Article 8. Liabilities of an Enterprise under Restructuring and Discharge of Liabilities in Respect of an Enterprise under Restructuring
From the date of coming into effect of the court ruling to initiate the enterprise restructuring proceedings to the date of adoption of the court ruling to approve the restructuring plan:
1) it shall be prohibited to discharge all the pecuniary obligations which were not discharged before the date of coming into effect of the court ruling to initiate the enterprise restructuring proceedings, including the payment of interest, default interest and compulsory payments, to recover debts from the enterprise in judicial or extrajudicial proceedings, to apply judicial pledge, servitudes, usufruct, to offset claims, to pledge, sell or otherwise transfer the assets of the enterprise necessary for continuation of its activities. The restrictions of this subparagraph shall not apply upon receiving the court authorization in the cases specified in paragraph 3 of Article 9 of this Law;
2) calculation of default interest and interest for all the liabilities of the enterprise which accrued before the date of coming into effect of the court ruling to initiate the enterprise restructuring proceedings shall be suspended, except for the calculation of late payment interest for delayed payment of salary due to the fault of the employer and other benefits related to employment relations, and, where the decision was adopted by a court ruling to initiate the restructuring proceedings, the voluntary commitments of the enterprise specified in subparagraph 6 of paragraph 1 of Article 5 of this Law;
3) recovery under writs of execution and set-off of claims shall be suspended. A bailiff shall, not later than within 15 calendar days from the date of adoption of the court ruling to initiate the enterprise restructuring proceedings, forward to the court examining the enterprise restructuring proceedings the writs of seizure and execution of the assets of the enterprise which were seized to ensure the execution of decisions of courts and other institutions prior to the initiation of the enterprise restructuring proceedings, but were not sold and shall inform thereof the custodian of the assets and the recoverer. A creditor’s claims which have not been satisfied by the bailiff shall be satisfied in accordance with the procedure laid down by this Law;
Article 9. Management of an Enterprise under Restructuring and the Assets Thereof
1. The management bodies of an enterprise shall, within their competence defined in the founding documents of the enterprise and other documents regulating the activities of the enterprise, in compliance with the restructuring plan and restrictions established in this Law and the court ruling, manage, use and dispose of all the assets owned or held in trust by the enterprise and manage the activities of the enterprise. The management body of the enterprise shall, within its competence, be responsible for the proper use of the funds of the enterprise for making current payments in the case specified in paragraph 2 of Article 7 of this Law and for the discharge of liabilities specified in subparagraphs 1, 2 and 4 of Article 8.
2. The activities of the management bodies of an enterprise in the course of restructuring shall be supervised by the restructuring administrator appointed by the court.
3. During the period of drafting of the restructuring plan, without the leave of the court:
1) it shall be prohibited to sell the enterprise or part thereof, its long-term assets or property rights;
2) it shall be prohibited to transfer the enterprise or part thereof, its long-term assets or property rights into the ownership of other persons, or to allow them to use the assets of the enterprise without remuneration;
4. Transactions concluded in breach of the requirements laid down in paragraph 3 of this Article shall be held invalid from the moment of their conclusion.
Article 10. Simplified Procedure for Initiation of Enterprise Restructuring Proceedings
1. The enterprise restructuring proceedings may be initiated in accordance with a simplified procedure provided its restructuring plan is drawn up in accordance with the provisions of this Law prior to the filing with the court of a petition to initiate the enterprise restructuring proceedings.
2. When applying a simplified procedure for initiation of the restructuring proceedings, the management body of the enterprise shall file with the court, together with a petition to initiate the enterprise restructuring proceedings, the following:
1) the documents specified in subparagraphs 1, 3, 4, 5, 6 and 7 of paragraph 4 of Article 6 of this Law;
2) the decision of the meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise to apply to creditors for initiation of the enterprise restructuring proceedings and their approval of the restructuring plan;
3. Upon receiving the documents specified in paragraph 2 of this Article, the court shall, not later than within one month, examine them and adopt a ruling to initiate the enterprise restructuring proceeding, approve the restructuring plan and appoint a restructuring administrator (hereinafter in this Article referred to as the “ruling to initiate the enterprise restructuring proceeding”) or to refuse to initiate the enterprise restructuring proceedings. Where the court initiates the enterprise restructuring proceedings in accordance with a simplified procedure or refuses to initiate the proceedings, paragraphs 1–4 and 6–13 of Article 7 of this Law shall apply mutatis mutandis. The court shall adopt a ruling to refuse to initiate the enterprise restructuring proceedings in accordance with a simplified procedure:
4. It shall be considered that the ruling to initiate the enterprise restructuring proceedings specified in paragraph 3 of this Article shall also approve the claims of creditors.
Article 11. Provision of Information and a Commercial (Industrial) Secret
1. Information on the implementation of the restructuring plan shall be provided to the chairman of the meeting of creditors, creditors, and the meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise in accordance with the procedure established by the meeting of creditors. Upon the request of the court, the chairman of the meeting of creditors and the institution authorized by the Government of the Republic of Lithuania specified in paragraph 3 of Article 15 of this Law, the information relating to examination of the enterprise restructuring proceedings shall be provided by the restructuring administrator.
2. The information which constitutes a commercial (industrial) secret, but which is necessary for drafting of the restructuring plan and assessment of its feasibility, must be filed with the court, the chairman of the meeting of creditors and the restructuring administrator upon their request. This information shall be provided to the chairman of the meeting of creditors and the restructuring administrator upon their signing of a statement of confidentiality undertaking to keep the commercial (industrial) secret.
Article 12. Restructuring Plan and Duration of Restructuring
1. A restructuring plan must specify the following:
2) the business plan of an enterprise for the period of restructuring, complying with the requirements of paragraph 2 of this Article;
3) a list of creditors, the amounts of their claims and time limits for the satisfaction thereof (in accordance with the sequence of and procedure for satisfaction of claims specified in Article 13 of this Law). The list of creditors shall also include persons who have lodged property claims against the enterprise with the court, but the court decisions in civil actions have not yet been adopted or have not yet come into effect, as well as persons in respect of whose credit claims separate appeals have been filed and have not yet been examined. The amount of claims of these persons shall be determined taking into consideration the amounts claimed by them. Upon coming into effect of decisions of other courts specified in subparagraph 5 of paragraph 11 of Article 7 of this Law, or upon adopting by a court of appeal a ruling on the confirmation of credit claims, the restructuring plan shall be revised accordingly;
4) the anticipated assistance of creditors with regard to the discharge of debt liabilities which arose before the initiation of the enterprise restructuring proceedings in court: extension of the time limits for the discharge of claims, waiver of claims (part thereof), replacement of a pecuniary obligation with another obligation (settlement from the assets and/or shares of the enterprise);
5) a list of debtors of the enterprise, including debtors in respect of whom judicial disputes or enforced recovery of debts are pending, which specifies the amounts of the rights of claim and methods of ensuring the discharge of obligations;
6) an estimate of administrative expenses, including the amount of remuneration for the restructuring administrator, for the period from the date of coming into effect of the court ruling to approve the restructuring plan to the date of coming into effect of the decision to close the enterprise restructuring proceedings or the ruling to terminate the proceedings;
2. The business plan of the enterprise for the period of restructuring must establish the measures and time limits for the implementation thereof, including:
1) withdrawal from loss-making activities, diversification of activities, manufacture of new products (goods or services), existing or anticipated sale contracts and other future prospects of the enterprise;
3) the assets of the enterprise to be sold and/or transferred, the procedure of the sale and/or transfer of the assets, the anticipated income to be received and the use thereof;
4) the assets to be revalued or written off in accordance with the procedure prescribed by the legal acts of the Republic of Lithuania, the anticipated expenses and income relating thereto;
5) the contracts to be terminated, which were entered into before the date of initiation of the enterprise restructuring proceedings and the anticipated consequences of such termination;
6) the intended structural reorganisation of the enterprise, the number of employees dismissed or employed and the expenses relating thereto;
7) the amount of anticipated credits to be received, their terms and conditions, as well as methods of securing the implementation of credit agreements and other sources of funding;
3. The duration of restructuring of the enterprise shall be established in the restructuring plan. Restructuring may not last longer than four years. The management body of the enterprise or the restructuring administrator may, by a decision of the meeting of creditors, file a petition with the court for extension of the enterprise restructuring period. The court or a judge may extend the duration of restructuring period, but not longer than for a period of one year.
Article 13. Sequence of and Procedure for Satisfaction of Creditors’ Claims
1. A creditor’s claims secured by pledge and/or mortgage shall be satisfied first from the proceeds of the sale of the enterprise’s pledged assets. Where the proceeds of the sale of the pledged assets are insufficient, the remaining amount of unsatisfied claims shall be satisfied in the manner (second in line) specified in paragraph 4 of this Article. Where the restructuring plan does not provide for the sale of the pledged assets, creditors’ claims secured by pledge and/or mortgage shall be satisfied in the manner (first in line) specified in paragraph 3 of this Article, without exceeding the threshold value of the pledged assets determined by an independent property appraiser. The creditor’s (creditors’) claims secured by pledge and/or mortgage to the extent they exceed the value of the pledged assets which are not sold during the restructuring shall be satisfied in the manner (second in line) specified in paragraph 4 of this Article.
2. All creditors’ claims based on the sequence specified in paragraphs 3, 4, 5, 6 of this Article shall be satisfied in two stages. During the first stage, claims of creditors, without the calculated interest and default interest, shall be satisfied in accordance with the sequence established in this Article; and during the second stage – the remaining creditors’ claims (interest and default interest) shall be satisfied according to the same sequence.
3. First in line for satisfaction shall stand claims of employees relating to employment relations (including income tax of individuals and state social insurance contributions); claims for compensation due to mutilation or other bodily injury, contraction of an occupational disease or death due to an accident at work; natural and legal persons’ claims for payment for agricultural produce purchased for processing and creditors’ claims secured by pledge and/or mortgage not exceeding the value of the pledged assets which are not sold during the restructuring.
4. Second in line for satisfaction shall stand all the remaining claims of creditors, except for the creditors’ claims specified in paragraph 6 of this Article, including claims for compulsory payments and loans granted from the funds borrowed on behalf of the State and loans granted with the State guarantee, or guarantee institutions the discharge of whose liabilities is guaranteed by the State, claims for assistance granted from the EU funds, and remaining creditors’ claims secured by pledge and/or mortgage which were not satisfied from the proceeds of the sale of the pledged assets and which exceed the value of the pledged assets not sold during the restructuring.
5. The claims of creditors who have granted credits not secured by pledge and/or mortgage specified in subparagraph 7 of paragraph 2 of Article 12 of this Law which arise following non-repayment of the credits by the enterprise within the time limits set in the agreements shall be satisfied before the creditors’ claims specified in paragraph 4 of this Article.
6. Third in line for satisfaction shall stand claims of participants of the enterprise under restructuring who became creditors of the enterprise prior to initiation of the restructuring proceedings and who alone or together with other participants control the enterprise under restructuring (who became creditors of the enterprise both directly and indirectly through parent enterprises or subsidiaries or through legal persons of other legal forms, on the adoption of decisions of the meeting of participants whereof they may have an influence (hereinafter referred to as “parent enterprises or subsidiaries“) not relating to employment relations.
7. During each stage, creditors’ claims of each successive sequence shall be satisfied following full satisfaction of the creditors’ claims of the preceding sequence of the respective stage. If funds are insufficient to satisfy all the claims of one sequence of one stage in full, the said claims shall be satisfied in proportion to the amount due to each creditor.
Article 14. Consideration and Approval of the Restructuring Plan
1. The management body of an enterprise shall submit a draft restructuring plan to the meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise. Upon the approval of the draft restructuring plan by the meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise, the management body of the enterprise shall, within one working day, submit the draft restructuring plan to the restructuring administrator. The draft restructuring plan shall be submitted to the restructuring administrator at least one month before the deadline set by the court for filing of the draft restructuring plan with the court. The meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise shall adopt the decision specified in this paragraph in accordance with the decision-making procedure laid down in the law regulating the legal form of an appropriate legal person, and where such a law does not provide for this procedure – by a simple majority vote of the participants of the enterprise present at the meeting.
2. Upon receiving the draft restructuring plan approved in accordance with the procedure established in paragraph 1 of this Article, the restructuring administrator shall:
1) prepare a written conclusion on the feasibility of the draft restructuring plan (hereinafter referred to as the “conclusion”) and submit it to the management body of the enterprise;
2) coordinate with the management body of the enterprise the time and venue of the anticipated meeting of creditors regarding the approval of the draft restructuring plan. The meeting of creditors must be held at least 10 working days before the deadline for filing of the draft restructuring plan specified in paragraph 1 of this Article with the court;
3) inform in writing each creditor, persons to whom the enterprise has secured the proper discharge of its own or third parties’ liabilities through suretyship, guarantees or other measures of securing the discharge of obligations, as well as persons who have provided guarantees or other measures of securing the discharge of obligations for the enterprise and the institution authorized by the Government of the Republic of Lithuania specified in paragraph 3 of Article 15 of this Law about the time and venue of the meeting of creditors regarding the approval of the draft restructuring plan, and about the ways to access the prepared draft restructuring plan and the conclusion. This information must be provided at least 10 working days before the anticipated date of the meeting of creditors.
3. The meeting of creditors shall approve the draft restructuring plan if the creditors whose amount of claims, in terms of value, accounts for at least 2/3 of the amount of all the creditors’ claims confirmed by the court vote in favour of it.
4. The chairman of the meeting of creditors shall submit the minutes of the meeting of creditors to the restructuring administrator within five calendar days from the meeting. Upon receiving the minutes of the meeting of creditors who have approved the draft restructuring plan, the restructuring administrator shall, not later than within three working days, submit the minutes and the draft restructuring plan with the conclusion to the court.
5. The draft restructuring plan must be filed with the court for approval not later than within six months from the date of adoption of the ruling to initiate the enterprise restructuring proceedings. At the request of the restructuring administrator or the management body of the enterprise, the court shall be entitled to extend the time limit specified in this paragraph, but no longer than for one month.
6. Upon receiving the documents specified in paragraph 4 of this Article, the court shall, within 15 calendar days, adopt a ruling on the restructuring plan in accordance with the written procedure. The court ruling to approve the restructuring plan shall be final and not subject to appeal.
7. Where the draft restructuring plan, approved by the creditors, provides for State aid which is to be granted to the enterprise under restructuring and about which the European Commission must be notified in the cases set forth by legal acts of the European Union, the state institutions – creditors and other providers of State aid shall, within 15 calendar days from the date of adoption of a decision of the meeting of creditors on the approval of the draft restructuring plan, notify the European Commission, in accordance with the procedure laid down by legal acts, about the State aid to be provided under the restructuring plan. Copies of documents certifying that the European Commission received and registered the notifications concerning the provision of State aid shall be submitted to the restructuring administrator within five calendar days from their receipt. The restructuring administrator shall file these documents and the documents specified in paragraph 4 of this Article with the court within three working days from the date of receipt of the copies. The state institutions – creditors and other providers of State aid must submit the decisions of the European Commission concerning the provision of State aid to the enterprise under restructuring, the restructuring administrator and the court within five calendar days from the date of receipt of these decisions.
8. The meeting of creditors must, within five calendar days from the date of the meeting of creditors, return the draft restructuring plan for revision to the management body of the enterprise if the plan does not provide for measures to ensure the discharge of all the liabilities of the enterprise laid down in the restructuring plan, including the liabilities to the State relating to the loans granted from the funds borrowed on behalf of the State and loans granted with the guarantee of the State or guarantee institutions the discharge of whose liabilities is guaranteed by the State and the liabilities arising in the case of repayment of assistance granted from the EU funds. The draft restructuring plan shall be returned to the management body of the enterprise for revision also in the case specified in paragraph 9 of this Article. Taking into account the comments and proposals expressed during the meeting or the decision of the European Commission, the management body of the enterprise shall, within 15 calendar days from the date of receipt of the decision adopted by the meeting of creditors, and in the case specified in paragraph 9 of this Article – within 15 calendar days from the date of coming into effect of the court ruling, submit to the meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise for approval a revised draft restructuring plan in accordance with the procedure set forth in paragraph 1 of this Article. The revised draft restructuring plan shall be submitted for consideration, considered and put to the vote in accordance with the same procedure as in the case of the initial version of the restructuring plan.
9. Where an application is made to the European Commission in the cases specified in paragraph 7 of this Article, upon receiving the documents certifying that the European Commission received and registered the notifications concerning the provision of State aid, the court shall, at the request of creditors, the restructuring administrator or the management body of the enterprise, suspend the enterprise restructuring proceedings until the decision of the European Commission is received. Where a positive decision of the European Commission is received, wherein no additional conditions concerning the provision of State aid are stipulated, or the decision stating that the measures to be undertaken are not considered to be State aid, the court shall decide whether or not to approve the restructuring plan. Where a positive decision of the European Commission is received, wherein additional conditions concerning the provision of State aid are stipulated binding on the enterprise under restructuring, or a negative decision of the European Commission is received, the court shall set an additional time limit, not shorter than 45 calendar days and not longer than 60 calendar days, for revising the draft restructuring plan in accordance with the procedure set forth in paragraph 8 of this Article and filing it with the court. In exceptional cases, the court shall have the right to extend this time limit, but no longer than for 30 calendar days. If the restructuring plan is not filed within the time limits set in this paragraph, the court shall adopt a decision to terminate the enterprise restructuring proceedings.
10. The management bodies of the enterprise and the restructuring administrator shall be responsible, within their competence, for the implementation of the restructuring plan approved by the court.
Article 15. Restructuring Administrator
1. A restructuring administrator shall be a natural or legal person appointed by the court, entitled to provide enterprise restructuring administration services.
2. A restructuring administrator shall perform his duties under a contract for services provided against payment concluded with an enterprise, signed on behalf of the enterprise by the management body of the enterprise. Such a contract must be concluded not later than within 10 calendar days from the date of coming into effect of the court ruling to initiate the enterprise restructuring proceedings. The amounts of administrative expenses and remuneration for the restructuring administrator must be in compliance with the amounts approved by the court rulings. The expenses of the activities of the restructuring administrator shall be covered by the enterprise under restructuring.
3. An institution authorized by the Government of the Republic of Lithuania shall, in accordance with the procedure established in the Rules for Supervision of Activities of Restructuring Administrators, supervise the activities of a restructuring administrator, submit data on restructuring of the enterprise for publication in the supplement Informaciniai pranešimai to the official gazette Valstybės žinios, compile and manage a list of restructuring administrators and announce the list on its website. In supervising the activities of the restructuring administrator, the institution authorized by the Government of the Republic of Lithuania shall, in accordance with the established procedure, perform inspections of the activities of the restructuring administrator and monitoring of the activities of the restructuring administrators.
4. A restructuring administrator shall be held liable for the damage caused to an enterprise and/or creditors pursuant to the laws of the Republic of Lithuania. The professional civil liability of an administrator shall be covered by compulsory insurance in accordance with the procedure established by the Government of the Republic of Lithuania.
Article 16. Requirements for Persons Seeking to Acquire the Right to Provide Enterprise Restructuring Administration Services
1. When seeking to acquire the right to provide enterprise restructuring administration services, a national of the Republic of Lithuanian or another Member State, any other natural person who benefits from the rights of movement within Member States conferred upon him by European Union legal acts must:
3) have a work record of at least three years as a head of an enterprise over the last five years or have a work record of two years as a bankruptcy administrator;
2. A natural person may not be regarded to be of sufficiently good repute if he:
1) has been convicted of a serious or grave crime, irrespective of whether or not the conviction has expired, or has been convicted of any other criminal act and the conviction has not yet expired;
2) has been dismissed from the office of a judge, a prosecutor, an advocate, an advocate’s assistant, a notary, a notary candidate (assessor), a notary’s agent, a court bailiff, a bailiff, a bailiff’s agent or a bailiff’s assistant for professional misconduct or misconduct in office, or has been dismissed from the office of a civil servant subject to a disciplinary sanction – dismissal from the office or from work for a serious breach of duties, or the validity of his restructuring administrator certificate has been cancelled and less than three years have passed from the date of dismissal or cancellation of validity of the certificate;
3. The head of a legal person seeking to acquire the right to provide enterprise restructuring administration services must be entitled to provide enterprise restructuring administration services. Seeking to acquire the right to provide enterprise restructuring administration services, a legal person must ensure that at least two employees of the legal person employed under a work contract, or the owner where the legal person is an individual enterprise, or a general member where the legal person is a partnership, hold a restructuring administrator certificate.
Article 17. Qualification Examination and Commission
1. The qualification examination shall be prepared by the Commission. A natural person who has failed the qualification examination or has failed to turn up for the examination may retake it not earlier than after three months. A natural person who has failed to turn up for the qualification examination for valid reasons may apply to the Commission for permission to retake it before the lapse of a period of three months and offer a justification for failing to turn up for the qualification examination. Upon recognizing the reasons of failure by the natural person to turn up for the qualification examination as valid, the Commission shall satisfy such an application of the natural person and allow him to take the qualification examination before the lapse of a period of three months. The number of retakes of the qualification examination shall not be limited.
Article 18. Issuance of a Restructuring Administrator Certificate and Cancelation of Validity Thereof
1. A restructuring administrator certificate, attesting to the restructuring administrator qualification of a national of the Republic of Lithuania or another Member State, any other natural person who benefits from the rights of movement within Member States conferred upon him by European Union legal acts, shall be issued and its validity cancelled, on the proposal of the Commission, by the Ministry of Economy of the Republic of Lithuania in accordance with the procedure established by the Government of the Republic of Lithuania or an institution authorized by it. A restructuring administrator certificate shall not be issued to a person not meeting the requirements specified in paragraph 1 of Article 16 of this Law. A restructuring administrator certificate shall be issued or a reasoned refusal in writing shall be presented to the applicant not later than within 30 days from the date of the qualification examination.
3. The validity of a restructuring administrator certificate shall be cancelled where:
2) it transpires that incorrect data have been submitted to obtain the restructuring administrator certificate;
3) the restructuring administrator commits violations specified in paragraph 1 of Article 20 while the penalty for the violations specified in paragraph 1 of Article 20 is still in force;
4) the restructuring administrator no longer meets the good repute requirements set in paragraph 2 of Article 16 of this Law;
4. The validity of a restructuring administrator certificate shall be cancelled on the grounds specified in subparagraphs 2 and 3 of this Article where the institution authorized by the Government of the Republic of Lithuania, indicated in paragraph 3 of Article 15, upon issuing a written warning to the administrator of the possible cancellation of validity of the certificate, does not receive, within 15 working days from the date of dispatch of the warning, new information and documents as a result of which the issue of cancellation of validity of the certificate might be returned to the Commission for reconsideration.
Article 19. Drawing Up of the List
1. The List shall be drawn up by the institution authorized by the Government of the Republic of Lithuania specified in paragraph 3 of Article 15 of this Law in accordance with the procedure established by the Government of the Republic of Lithuania or the institution authorized by the Government of the Republic of Lithuania. The following shall be entered on the List:
1) natural persons who have been issued a restructuring administrator certificate in accordance with the procedure laid down in paragraph 1 of Article 18 of this Law;
2. The decision to enter a natural and/or legal person on the List shall, not later than within 10 working days from the date of issuance of a restructuring administrator certificate to the natural person and/or the date of submission by the legal person documents evidencing the compliance with the requirements laid down in paragraph 3 of Article 16, be adopted by the institution authorized by the Government of the Republic of Lithuania specified in paragraph 3 of Article 15 of this Law and announced on its website.
3. The institution authorized by the Government of the Republic of Lithuania specified in paragraph 3 of Article 15 of this Law must refuse to enter a legal person on the List and give a reasoned notice thereof to the legal person by registered mail not later than within 10 working days from the date of submission of the documents or copies thereof, where the legal person does not comply with the requirements laid down in paragraph 3 of Article 16 of this Law.
4. The temporary nature of the provision of restructuring administration services shall be assessed by the institution authorized by the Government of the Republic of Lithuania specified in paragraph 3 of Article 15 of this Law in accordance with the procedure established by the Government of the Republic of Lithuania or the institution authorized by the Government of the Republic of Lithuania.
Paragraph 4 shall be repealed as of 1 October 2011.
5. The institution authorized by the Government of the Republic of Lithuania specified in paragraph 3 of Article 15 of this Law shall remove the persons referred to in paragraph 1 of this Article from the List, where:
2) bankruptcy proceedings are initiated in respect of the legal person or out-of-court bankruptcy procedures are under way, restructuring proceedings are initiated or the legal person is in liquidation;
4) it transpires that in order to be entered on the List, the legal person has submitted incorrect data;
6. A legal person shall be removed from the List on the grounds specified in subparagraphs 4 and 5 of paragraph 5 of this Article, where the institution authorized by the Government of the Republic of Lithuania, specified in paragraph 3 of Article 15, having warned the legal person in writing of the possible removal from the List, does not receive, within 15 working days from the date of dispatch of the warning, new information and documents as a result of which the legal person should not be removed from the List.
Article 20. Liability of a Restructuring Administrator
1. A restructuring administrator may be subject to a penalty in accordance with the procedure established by the Government of the Republic of Lithuania or an institution authorized by it for failure to execute or properly execute the requirements laid down in legal acts regulating enterprise restructuring, procedural court documents (decisions, orders, rulings and resolutions), resolutions of the meeting of creditors and committee of creditors, or other violations discovered in the course of inspection of the restructuring administrator’s activities. The institution authorized by the Government of the Republic of Lithuania specified in paragraph 3 of Article 15 shall impose the following penalties:
2. Upon establishing repeated violations specified in paragraph 1 of this Article with the penalty being still in force, as well as in the cases laid down in paragraph 5 of Article 19 of this Law, the institution authorized by the Government of the Republic of Lithuania specified in paragraph 3 of Article 15 of this Law must apply to the Commission regarding the decision to propose to cancel the validity of a restructuring administrator certificate and/or to remove him from the List.
Article 21. Appointment, Removal from Office and Substitution of a Restructuring Administrator
1. The court shall appoint a restructuring administrator in accordance with the procedure laid down in this Law.
2. A creditor of the enterprise in respect of which restructuring proceedings have been initiated (a person in employment relations with the creditor or, where the creditor is a legal person, a member of its management bodies), a person who, under laws or other legal acts, has no right to be the head of the enterprise, the owner of the enterprise or a parent enterprise or a subsidiary, a member of its management bodies, his deputies (directors), the chief accountant (accountant), the head of a structural division in charge of keeping of the enterprise’s accounts (the head of an enterprise providing accounting services), a participant holding or having held, during the last 36 months prior to initiation of the restructuring proceedings, by the right of ownership more than 10 per cent of shares, interests or member shares of the enterprise under restructuring, its parent enterprise or a subsidiary may not be appointed as a restructuring administrator. These restrictions shall also apply to the persons referred to in this paragraph who were employed in the enterprise under restructuring and employment contracts were terminated therewith during the last 36 months prior to initiation of the restructuring proceedings. The restrictions set for a restructuring administrator specified in this paragraph shall apply to the head of a legal person entitled to provide restructuring administration services, his deputies (directors), the chief accountant (accountant), the head of a structural division in charge of keeping of the enterprise’s accounts, members of the management bodies of a legal person, employees of a legal person entitled to provide enterprise restructuring administration services, participants of a legal person.
3. The court shall remove a restructuring administrator from office in all cases where it receives information that the restructuring administrator has forfeited the right to provide enterprise restructuring administration services. In this case, the court shall, not later than within 15 calendar days from the receipt of the information, remove the restructuring administrator from the enterprises under his administration.
4. The court may remove a restructuring administrator from office in the following cases:
2) where the management body of the enterprise, upon approval of the meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise, applies for removal of the restructuring administrator from office;
3) where the management body of the enterprise, upon approval of the meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise and the meeting of creditors, applies for removal of the restructuring administrator from office;
4) where the meeting of creditors of the enterprise under restructuring applies for removal of the restructuring administrator from office;
5. The application for removal of the restructuring administrator from office filed with the court must be reasoned. The court shall dismiss the application for removal of the restructuring administrator from office in the following cases:
1) where the decision of the meeting of creditors to remove the administrator from office has been adopted in violation of the decision-making procedure of the meeting of creditors established in this Law;
2) where the creditor (creditors) who have filed an application for removal of the administrator from office do not comply with the requirement specified in subparagraph 8 of Article 24 of this Law;
3) where satisfaction of the application would infringe the interests of the creditors who voted against the decision of the meeting of creditors, the creditors who did not participate in the meeting of creditors or those creditors who did not submit the application;
6. The issue of removal of the administrator from office shall be resolved by a court ruling not later than within 15 days from the receipt of the application. Where the administrator is removed from office, the court shall, by the same ruling, appoint as a restructuring administrator another person nominated by the management body or the meeting of creditors of the enterprise. The court may recognize the ruling on the removal of the administrator from office and appointment of a new administrator to be promptly enforceable.
7. On the recommendation of the management body of the enterprise, upon the approval of the chairman of the meeting of creditors, the court shall adopt a ruling on temporary substitution of a natural person of the restructuring administrator in the event of his temporary incapacity for work or in any other cases when he is temporarily unable to perform his duties.
8. In the event of death of a natural person of the restructuring administrator, the court shall appoint another restructuring administrator, nominated by the management body of the enterprise, upon the approval of the meeting of participants of the enterprise or the owner thereof, or an institution exercising the rights and duties of the owner of a state or municipal enterprise.
Article 22. Duties and Rights of a Restructuring Administrator
1. Upon adoption by the court of a ruling to initiate the enterprise restructuring proceedings, a restructuring administrator must:
1) take measures to draft, submit for approval and implement a restructuring plan within the time limits set by the court;
2) supervise the activities of the management bodies of the enterprise under restructuring relating to the implementation of the restructuring plan;
3) convene the meetings of creditors, participants of the enterprise, owners thereof or representatives of an institution exercising the rights and duties of the owner of the state or municipal enterprise;
4) without a voting right, participate in the meetings and sittings of all the management bodies of the enterprise and the meetings of creditors (sittings of the committee of creditors);
5) indicate to the members of management bodies the shortcomings in their activities and set a time limit for elimination of those shortcomings;
6) inform the court examining the enterprise restructuring case of the coming into force of the decisions of other courts specified in subparagraph 5 of paragraph 11 of Article 7 of this Law within five working days from becoming aware of the coming into force of these decisions;
7) inform the court, the meeting of creditors, participants of the enterprise, the owners thereof, representatives of an institution exercising the rights and duties of the owner of a state or municipal enterprise, or the committee of creditors about failure to implement the restructuring plan or improper implementation thereof and, upon the approval of the meeting of creditors, apply to the court for termination of the enterprise restructuring proceedings;
8) forward data on the restructuring of the enterprise to the institution authorized by the Government of the Republic of Lithuania specified in paragraph 3 of Article 15 of this Law;
9) at the request of the administration of the municipality on the territory whereof the registered office of the enterprise under restructuring is located, provide information on the progress of restructuring;
10) notify the court examining the enterprise restructuring case that the restructuring plan will not be submitted within the time limits specified in this Law;
11) file an application with the court (courts) on his removal from office of the restructuring administrator of all the enterprises under his administration not later than on the next working day following the day on which he became aware of the forfeiture of the right to provide enterprise restructuring administration services; on the same day, submit a copy of the application on removal from office to the management bodies and the chairmen of the meetings of creditors of all the enterprises under his administration.
2. Upon adoption by the court of a ruling to initiate the enterprise restructuring proceedings, a restructuring administrator shall have the right:
1) to enter the premises belonging to the enterprise, inspect the accounts, correspondence, other business documents and databases of the enterprise;
3) to obtain information about all the decisions adopted by the management bodies and the meeting (committee) of creditors of the enterprise;
4) to obtain copies of all the documents which the management body and the chairman of the meeting of creditors file with the court;
3. The administrator must:
1) constantly improve his professional qualification (the administrator, as a legal person, must ensure the continuous improvement of professional qualifications of the employees who have the right to provide restructuring administration services);
Article 23. Confirmation of Creditors’ Claims
1. The creditors shall, within a time period prescribed by the court, forward their claims accompanied by the documents substantiating them to the restructuring administrator, and shall also specify how the enterprise has secured the discharge of these claims.
2. Upon checking the claims lodged by creditors within the time period prescribed by the court against the accounting documents of the enterprise, the restructuring administrator shall, not later than within 15 calendar days from the expiry of the time limit for submission of claims, forward them to the court for approval.
3. Before the date of adoption of the court ruling to approve the restructuring plan, the court shall have the right to accept creditors’ claims that arose prior to the initiation of the enterprise restructuring proceedings, which were lodged after the expiry of the prescribed time period specified in paragraph 1 of this Article, where it recognizes the reasons for missing the deadline to be important.
4. In the course of the enterprise restructuring, the claims of a creditor may be transferred to another creditor or person. The sequence of claims established in accordance with the provisions of Article 13 of this Law shall not change.
5. The court shall adopt a ruling to approve creditors’ claims in accordance with the written procedure. Upon the request of the participating parties, oral proceedings may be allowed. The issue of approval of creditors’ claims contested by the restructuring administrator shall be resolved by the court at a court sitting, upon notification of the restructuring administrator and persons whose claims are contested.
6. A ruling on approval of creditors’ claims or refusal to approve thereof may be appealed against by filing a separate appeal in accordance with the procedure prescribed by legal acts, appealing against the ruling shall not suspend the enterprise restructuring. A separate appeal against the ruling on approval of creditors’ claims or refusal to approve thereof must be examined in the Court of Appeal of Lithuania not later than within 30 days from its receipt.
7. Adjustments to the list of creditors and their claims relating to restructuring (unpaid taxes, other compulsory payments, arrears of pay to the dismissed employees, unpaid credits specified in subparagraph 7 of paragraph 2 of Article 12 of this Law, etc.) shall be confirmed by a court ruling prior to adoption by the court of a ruling on the termination of or a decision on the closure of the enterprise restructuring proceedings.
Article 24. Rights of Creditors of an Enterprise under Restructuring
The creditors of an enterprise under restructuring shall have the right:
2) in accordance with the set procedure, to obtain from the management body of the enterprise and the restructuring administrator information about the enterprise restructuring, except for information constituting a commercial (industrial) secret. Upon submission of the application and signing of the statement of confidentiality undertaking to keep the commercial (industrial) secret, the chairman of the meeting of creditors shall have the right to also obtain the information constituting a commercial (industrial) secret;
3) to provide assistance with regard to the discharge of liabilities which arose before the initiation of the enterprise restructuring proceedings in court: to extend the deadlines for the discharge of claims, waive all claims (part thereof), replace the pecuniary obligation by any other obligation – to give their consent for the enterprise to settle with creditors from the assets and shares of the enterprise. Creditors who are state institutions shall provide such assistance in accordance with the procedure established by legal acts;
4) in accordance with the procedure prescribed by legal acts, to claim compensation for damage incurred due to the fault of the management bodies of the enterprise or the restructuring administrator;
5) to submit proposals to the restructuring administrator or the management body of the enterprise administration in relation to the restructuring plan;
6) to apply to the meeting of creditors in relation to the activities of the restructuring administrator or replacement thereof;
7) to appeal in court against the resolutions adopted by the meeting (committee) of creditors within 14 calendar days from the day they became aware of or should have become aware of these resolutions;
Article 25. Rights of the Meeting of Creditors of an Enterprise under Restructuring
1. The meeting of creditors of an enterprise under restructuring shall have the right:
2) to elect the committee of creditors and delegate thereto a part of the rights of the meeting of creditors;
4) to apply to court regarding the restriction of the competence of the management bodies of the enterprise and specify whereto these functions are to be transferred;
5) to determine the procedure according to which the management body of the enterprise and/or the restructuring administrator submit information on the implementation of the restructuring plan to the chairman of the meeting of creditors, creditors, and the meeting of participants, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise;
7) to apply to court for removal of the restructuring administrator from office and propose a candidate for the restructuring administrator to the court;
8) to endorse the proposal of the restructuring administrator to apply to court for termination of the enterprise restructuring proceedings in the event of failure to implement or improper implementation of the restructuring plan, or to apply to court for termination of the enterprise restructuring proceedings where this is approved by the creditors the amount of whose claims, in terms of value, accounts for at least 2/3, in terms of value, of the amount of all the confirmed claims of creditors;
9) to put the chairman of the meeting of creditors under an obligation to sign a statement on the implementation of the restructuring plan;
2. The meeting of creditors of an enterprise under restructuring shall also enjoy other rights laid down in this Law.
3. The chairman of the meeting of creditors of an enterprise under restructuring shall have the right to attend the meetings and sittings of the management bodies of the enterprise.
4. Members of the management bodies of the enterprise may participate in all the meetings of creditors of an enterprise under restructuring without a voting right. An institution authorized by the Government of the Republic of Lithuania specified in paragraph 3 of Article 15 of this Law may participate in the meetings of creditors of the enterprise under restructuring where the issue of removal form office (replacement) of the administrator is considered. Persons entitled to participate in the meeting of creditors shall be notified in writing of the envisaged meeting of creditors of the enterprise under restructuring at least 10 calendar days prior to the meeting date with an agenda of the meeting of creditors attached.
Article 26. Procedure for Adoption of Resolutions of the Meeting of Creditors of an Enterprise under Restructuring
1. The meeting of creditors shall be considered valid if it was attended by or votes were cast in writing in advance by the creditors the amount of whose claims accounts for more than half of the total amount of all the confirmed claims of creditors. The requirements of this paragraph shall not apply to a repeat meeting of creditors.
2. For each meeting of creditors, the restructuring administrator must provide a copy of the court ruling whereby the list of creditors and their claims have been confirmed. A resolution of the meeting of creditors shall be considered adopted where it was voted in favour of by the creditors whose amount of confirmed claims, in terms of value, accounts for at least half of the amount of all the confirmed claims of creditors, except for the cases specified in subparagraph 3 of paragraph 2 of Article 10, paragraph 3 of Article 14, and subparagraph 8 of paragraph 1 of Article 25 of this Law. Where the list of creditors and/or their claims are adjusted during the restructuring (certain amounts have been disbursed, claims are increased, etc.), the meeting of creditors may not be convened prior to the coming into effect of the court ruling whereby the respectively adjusted list of creditors and/or their claims have been confirmed.
3. A creditor shall be entitled to cast his vote in writing in advance on each draft decision on the agenda of the meeting of creditors. These votes shall be included in the results of the voting at the meeting of creditors and mention thereof must be made at the meeting of creditors.
4. Where the meeting of creditors of an enterprise under restructuring failed due to no quorum, the restructuring administrator must, within 15 calendar days, convene a repeat meeting of creditors. This meeting shall have the right to adopt resolutions only based on the agenda of the failed meeting.
5. A resolution shall be considered adopted at a repeat meeting of creditors where it was voted in favour of by the creditors whose amount of confirmed claims, in terms of value, accounts for more than half of the amount of all the confirmed claims of creditors who have taken part in the meeting and have cast their votes in writing in advance, except for the cases specified in subparagraph 3 of paragraph 2 of Article 10, paragraph 3 of Article 14, and subparagraphs 7 and 8 of paragraph 1 of Article 25 of this Law, where a resolution at the meeting of creditors is adopted according to the same procedure as at the failed meeting.
6. Resolutions of the meeting of creditors shall be binding on all the creditors. The chairman of the meeting of creditors shall, not later than within five working days from the day of the meeting of creditors, submit the minutes of the meeting to the management body of the enterprise and to the restructuring administrator. Upon receiving the minutes of the meeting of creditors, the restructuring administrator shall, not later than within three working days, submit copies thereof to the court examining the enterprise restructuring case and to each creditor.
Article 27. Committee of Creditors of an Enterprise under Restructuring
1. The committee of creditors may be elected at the first or any subsequent meeting of creditors. Only creditors may be members of the committee of creditors, except for a person authorized to defend the claims of employees relating to employment relations. The chairman of the meeting of creditors shall also be the chairman of the committee of creditors. A member of the committee of creditors must be a person authorized to defend the claims of employees relating to employment relations where the enterprise must satisfy such claims of the employees, compensate for damage due to mutilation or other bodily injury, contraction of an occupational disease or death due to an accident at work. The committee of creditors must be comprised of at least five members.
2. The committee of creditors shall perform the functions assigned to it by the meeting of creditors, and shall defend the interests of creditors during the periods between the meetings of creditors.
3. Sittings of the committee of creditors shall be considered lawful if attended by more than half of its members. One member of the committee of creditors shall have one vote. Resolutions adopted by the committee of creditors shall be valid if more than half of all the members of the committee vote in favour of them. In the event of a tie, the chairman shall have the casting vote. The chairman of the meeting of creditors shall, not later than within five calendar days from the day of the sitting of the committee of creditors, submit the minutes of the sitting to the management body of the enterprise and the restructuring administrator. Upon receiving the minutes of the sitting of the committee of creditors, the restructuring administrator shall, not later than within three working days, submit copies thereof to the court examining the enterprise restructuring case and to each creditor.
Article 28. Termination of the Enterprise Restructuring Proceedings
1. The court shall terminate the enterprise restructuring proceedings where there is at least one of the following conditions:
3) the enterprise under restructuring has satisfied the claims of all creditors before the time limit set in the restructuring plan and the restructuring administrator has submitted the evidence thereof to the court;
4) the restructuring administrator or the meeting of creditors submit to the court evidence of failure to implement or improper implementation of the restructuring plan;
2. Upon coming into effect of the court ruling on the termination of the enterprise restructuring proceedings on the grounds specified in subparagraphs 1, 4 or 5 of paragraph 1 of this Article, and where there are other conditions to initiate bankruptcy proceedings as specified in the Republic of Lithuania Enterprise Bankruptcy Law, a petition on the initiation of bankruptcy proceedings must be filed with the court in accordance with the procedure laid down by the Republic of Lithuania Enterprise Bankruptcy Law.
3. A restructuring administrator must, within five working days from the date of coming into effect of the court ruling to terminate the enterprise restructuring proceedings, notify thereof persons specified in paragraphs 11 and 12 of Article 7 of this Law.
4. From the date of coming into effect of the court ruling to terminate the enterprise restructuring proceedings on the grounds specified in subparagraphs 1, 4 and 5 of paragraph 1 of this Article, all agreements on the waiver of the total amount of creditors’ claims (part thereof), on the replacement of the pecuniary obligation with any other obligation and on the extension of the time limits for the discharge of obligations shall become null and void unless the enterprise and the creditors have agreed otherwise. Compulsory payments, calculation of the interest and default interest as well as recoveries, with the exception of the discharged liabilities, shall be renewed from the moment of suspension of calculation thereof and shall be calculated for the period including the initiation of the restructuring proceedings and investigation of the restructuring case in the court; waivers of creditors’ claims shall also be revoked. This provision shall also apply to the arrears in current payments which accrued during the restructuring.
Article 29. Closure of the Enterprise Restructuring
1. Upon the implementation of the restructuring plan, the management body of the enterprise and the restructuring administrator shall, within 10 working days from the day of performance of the last payment to the creditors, as set out in the restructuring plan, prepare a statement on the implementation of the restructuring plan. The statement shall be signed by the management body of the enterprise, the restructuring administrator, authorized persons of the meeting of participants of the enterprise, the owner thereof, or an institution exercising the rights and duties of the owner of a state or municipal enterprise and the chairman of the meeting of creditors.
2. A restructuring administrator shall submit the statement referred to in paragraph 1 of this Article to the court not later than within three working days from signing thereof.
3. Upon receiving the statement referred to in paragraph 1 of this Article, the court shall adopt a decision to approve the submitted statement on the implementation of the restructuring plan and close the enterprise restructuring proceedings.
4. From the date of the court decision to approve the statement on the implementation of the restructuring plan and to close the enterprise restructuring proceedings, or the date of coming into effect of the ruling to terminate the restructuring proceedings in accordance with the procedure laid down in Article 28 of this Law, the enterprise shall forfeit the status of an enterprise under restructuring. The date of forfeiture of the status of an enterprise under restructuring shall constitute the data of the Register of Legal Entities.
5. A restructuring administrator must, within five working days from the date of coming into effect of the court decision to terminate the enterprise restructuring proceedings, notify thereof persons specified in paragraphs 11 and 12 of Article 7 of this Law.
Annex to Republic of Lithuania
Law on Restructuring of Enterprises
EU LEGAL ACT IMPLEMENTED BY THIS LAW
Council Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings (OJ 2004 special edition, Chapter 19, Volume 1, p. 191) with the latest amendments adopted by Council Regulation (EC) No 788/2008 (OJ 2008 L 213, p. 1) 788/2008 (OL 2008 L 213, p. 1).