The Court of Appeal of Lithuania held that the bankruptcy process of AB INTER RAO Lietuva had been started unlawfully, without informing clients of law firm TGS Baltic: AB ORLEN Lietuva, UAB PHILIP MORRIS LIETUVA and AB Lietuvos paštas. Failure to do that deprived them of a possibility to object to the application of the out-of-court bankruptcy procedure, appointment of the insolvency administrator, eliminated the possibility to present their arguments and evidence regarding the insolvency of the company, a possibility to initiate a judicial dispute that would actually prevent the start of such a bankruptcy procedure.
The court noted that the essence of bankruptcy carried out in an out-of-court manner is an amicable process where the company and all its creditors (even such creditors, the claims of which the company does not agree) reach a common agreement. Therefore, a company seeking bankruptcy must treat each person who potentially can make claims against it for the fulfilment of the company’s obligations, irrespective of the amount of the financial claims, as its creditor and must inform all creditors about its intention to start a bankruptcy process: both those the claims of which it accepts and those that it does not.
More information (LT language) https://bit.ly/3rpZ3Yy
