LEGAL NATURE AND CONTENTS OF THE REORGANIZATION PLAN IN BANKRUPTCY PROCEEDINGS

Abstract

The article is devoted to the study of the legal nature and content of the reorganization plan in bankruptcy proceedings. In practice, the application of reorganization procedures to debtors within bankruptcy cases often proves to be insufficiently effective, which indicates a number of shortcomings and problems in the legal regulation and practical implementation of this procedure. It is argued that the reorganization plan is the key document of the reorganization procedure, and the achievement of its main objective – the restoring the debtor’s solvency – largely depends on the quality and content of the plan.

Based on the analysis of existing scholarly approaches to the concept and legal nature of the reorganization plan, it is substantiated that by its nature the reorganization plan constitutes both a substantive legal and a procedural legal act that determines the step-by-step process of overcoming the debtor’s insolvency.

Special attention is paid to the analysis of legislative requirements concerning the content of the reorganization plan as defined by the Code of Ukraine on Bankruptcy Procedures. It is established that the reorganization plan must include a set of measures aimed at restoring the debtor’s solvency, the timeframes for their implementation, as well as the conditions for satisfying creditors’ claims. The social orientation of bankruptcy legislation is emphasized, which is reflected, in particular, in the mandatory inclusion in the plan of measures aimed at repaying wage arrears.

Judicial practice concerning the approval of a debtor’s reorganization plan is also analyzed. Particular attention is paid to certain law enforcement issues related to the involvement of investors in the reorganization procedure and the approval of the reorganization plan by different classes of creditors. It is concluded that further improvement of legal regulation is necessary in order to increase the effectiveness of the application of reorganization procedures in bankruptcy cases.

It is emphasized that the approval of the reorganization plan should be the result of a consensus between the debtor and the creditors. At the same time, it should be borne in mind that bankruptcy procedures always involve certain risks of incomplete satisfaction of creditors’ claims. Therefore, if bankruptcy proceedings have already been initiated against a debtor, creditors should be aware of the risks inherent in such procedures, including the possibility that not all declared creditors’ claims will ultimately be satisfied.