SANITATION AS AN ALTERNATIVE TO BANKRUPTCY

Abstract

In the conditions of the insolvency of a large part of Ukrainian enterprises, it becomes

urgent to create an effective bankruptcy institution, which is designed to ensure a balance of interests of the state and business, to regulate economic relations between economic entities in situations when one of them becomes insolvent, as well as to minimize the socio-economic costs of cyclical functioning of the market economy.

The article identifies the advantages of pre-trial rehabilitation for the timely rehabilitation of the enterprise, emphasizing the fact that Ukrainian bankruptcy legislation currently needs a significant update, especially in the part of restorative procedures, in order to bring it into line with European practices. In this direction, an important step will be the implementation of the Directive of the European Parliament and the Council (EU) 2019/1023 on preventive restructuring, as well as on measures to improve the efficiency of restructuring, insolvency and debt repayment procedures. The purpose of this procedure is early prevention

of bankruptcy and preservation of viable enterprises at an early stage of difficulties. Its relevance is growing not only for private business. It is also an effective tool for preventing bankruptcy problems of state-owned enterprises.

In the course of the research, it was established that an essential common characteristic of preventive restructuring and bankruptcy proceedings is the collective nature of spreading legal consequences to all creditors, including those who disagree with them, in order to achieve the goal. During the preventive restructuring procedure, in particular, there is a ban on any of the creditors, including those from the dissenting minority, to initiate demanding procedures, even if there are legal grounds. This is due to the fact that the legal consequences apply to all creditors, eliminating the conflict of interests due to their assessment of the debtorʼs situation.