Defence of interests of creditors in company bankruptcy procedure under the lithuanian court jurisprudence

Defence of Interests of Creditors in Company Bankruptcy Procedure under the Lithuanian Court Jurisprudence In enterprise bankruptcy proceedings the interests of creditors are ensured by implementing measures which are provided for in the Enterprise Bankruptcy Law and the Civil Code. It should be noted though that according to the legal acts, interests of creditors can be defended by a court, bankruptcy administrator and creditors of the enterprise in bankruptcy. This thesis analyses methods of defending creditors’ interests in the bankruptcy proceedings and application thereof, and reveals the drawbacks of legal regulation as well benefits which ensure efficient protection of creditors’ interests. Having analysed attitudes of courts and the changing statutory regulation, it can be concluded that one of the main purposes of bankruptcy proceedings is to meet the interests of creditors without acting against the interests of the enterprise in bankruptcy. Besides, it is important to satisfy interests of all creditors, without distinguishing any of the creditors as being a priority. Protection of creditors’ interests is firstly ensured by submitting creditor’s claim to the bankruptcy administrator. It should be noted that only claims which are sufficiently grounded and raise no doubts are accepted; thus, not all parties are included in the proceedings, in order to ensure that only grounded claims are satisfied. Furthermore, provisions of the Enterprise Bankruptcy Law are regularly amended, and the analysis reveals that these amendments aim at defending creditors’ interests. For example, bankruptcy administrator is obliged to within period of 6 months to examine the contracts of the enterprise in bankruptcy entered into within 36 months prior to initiation of the bankruptcy proceedings. Such an obligation ensures both recovery of assets to the enterprise in case of a voidable transaction, and efficiency of the bankruptcy proceedings. In addition, bankruptcy administrator and/or creditor are entitled to challenge any transaction (on the grounds of actio Pauliana or by filing an indirect action), and in case of satisfaction of such claims, the assets or its equivalent in money are returned to the enterprise and are used in the liquidation proceedings and then used to satisfy the interests of creditors. In conclusion, defence of creditors’ interests in the enterprise bankruptcy proceedings is warranted by the provisions of the Enterprise Bankruptcy Law, position of the courts and application of legal regulations. It is to be highlighted that legal regulation aims at effective protection of creditors’ interests, even though satisfaction of creditors’ interests is often possible only when the number of creditors is small and the enterprise in bankruptcy possesses sufficient assets