To liquidate or not to liquidate: insolvency issues of organizations discussed in Vitebsk

In the first half of this year alone, 14 organisations in the Vitebsk region, which had previously found themselves in a difficult economic situation, have reached a low degree of insolvency, and another four have improved their financial results. 78 organisations of communal property have managed to increase their own working capital by 90 million rubles.

This was announced by the Deputy Chairperson of the Regional Executive Committee, Anzhelika Nikitina, during a round table on the application of the provisions of the Law "On the Settlement of Insolvency". She emphasised that positive trends in preventing bankruptcy and liquidation of organisations have emerged precisely due to the operation of this legislative act.

– The main goals of the said law are to preserve business, stabilise the financial and economic condition of enterprises, and preserve workforces, rather than liquidation and bankruptcy, – emphasised Anzhelika Nikitina. – Commissions for the settlement of insolvency operate under district and regional executive committees, and their powers regarding work with enterprises of private ownership, regardless of staff numbers, have been expanded.

Commissions provide consulting and other assistance to enterprises of both state and private ownership. Moreover, as practice shows, the latter apply for it more often. Various mechanisms are used for enterprise rehabilitation: settlement agreements concluded with the help of the regional economic court, debt restructuring, and contributions to authorised capital. Financial recovery measures are also applied at the enterprise level, for example, internal debt, which affects the improvement of socio-economic development indicators and revenue growth.

– A mechanism such as enterprise reorganisation by transferring its shares to a more successful enterprise is actively used, – noted Anzhelika Nikitina. – For example, this year the shares of OJSC "Znamya Industrializatsii" were transferred to RUPTP "Orshansky Lnokombinat", as a result of which the debt was restructured, and the enterprise is increasing its production volumes.

The practice of the northern region in insolvency regulation, including judicial practice, is of interest to the entire republic. Vitebsk was not chosen as the venue for the round table by chance: in the region, the insolvency (bankruptcy) procedure is used by active debtors; state bodies, including local administration and self-government, take an active position in terms of using insolvency regulation mechanisms for debt recovery into the budget. In addition, the regional economic court has considered many cases, based on which certain conclusions can be drawn, and the time has come to summarise judicial practice.

“It is important for us that the discussed law is well-developed in terms of legal technique and style of presentation,” noted the Deputy Chairman of the Supreme Court, Yuri Kobets. “It is equally important that it works in practice, and is understood by all interested parties in the correct resolution of cases of this category. For this, it is important for us to hear from the local level what issues arise for state bodies, enterprises, and representatives of legal entities.”

Representatives of state bodies, universities, judges, and crisis managers were invited to participate in the round table. Based on the results of the event, materials will be prepared for consideration at the Plenum of the Supreme Court. Its thematic meeting will take place at the end of the year and will result in clarifications on all controversial issues regarding the application of the Law "On Insolvency Regulation".

Yuri Kobets also held a personal reception of citizens in Vitebsk and met with the staff of OJSC "Vitebskiye Kovry".

vitebsk-region.gov.by