Peculiarities of farm bankruptcy

Bankruptcy of farming in Ukraine has its own specific features due to the nature of the agricultural sector. The main feature provided by the legislation is the seasonality of agricultural production.

Bankruptcy initiation procedure

It is possible to initiate the bankruptcy procedure of a farm by a collegial decision. The application is submitted to the economic court only with the written consent of all members of the economy. This ensures the protection of the interests of all participants and prevents potential abuse.

Documentation is required to initiate the procedure

When initiating bankruptcy, a comprehensive package of financial documentation must be provided. The following must be added to the bankruptcy application:

• Detailed description of the composition and assessment of the value of the property of the farm.
• Information about the personal property of each household member with an estimate of its value.
• Forecast of future income, including calculations of expected income after the end of the current agricultural season.

The role of the property manager

The property disposal procedure plays an important role in the process of farm bankruptcy. The key element is the appointment of a property administrator, which is carried out in accordance with the legislation and is carried out by the commercial court.

The property administrator acts as an independent specialist authorized by the court to supervise the debtor's economic activities, analyzes his financial condition and develops strategies for restoring solvency.

Time frames

In the process of bankruptcy of a farm, the property disposal procedure has certain time frames of fifteen months, which take into account the specifics of agricultural production. The duration of this procedure is tied to the complete agricultural cycle, from growing and harvesting to processing and sale of products.

Early termination of the disposition procedure

The grounds for early termination of the property disposal procedure are two factors:

• This is non-fulfillment of the measures provided for in the solvency recovery plan.
• Other circumstances that indicate the impossibility of restoring solvency.

Importantly! The consequences for the farm, in the case of early termination of the procedure, are the commercial court declaring it bankrupt and opening the liquidation procedure.

Key features

Farm bankruptcy has a number of key features that include the following aspects:

• Formation of a liquidation mass from jointly owned real estate, live assets, machinery, equipment, intangible assets and property acquired for the needs of the economy with joint funds.
• The issue of land use is that leased land plots are not included in the liquidation mass. It also ensures preservation of the intended purpose of the land.
• Demarcation of the common property of the farm from the personal property of the members of the farm.
• Real estate is sold through an auction. At the same time, it is important to preserve the agricultural purpose of the property.
• The consequences of being recognized as bankrupt are that its activities are immediately terminated and the liquidation procedure is initiated.
• Informing state bodies by official notification.

Legal assistance

If your farm is in a difficult financial situation, and you don't know what to do next, contact the lawyers of Prykhodko and Partners.

Qualified specialists will provide you with a full consultation, explaining your actions and possible consequences, and will be by your side until the bankruptcy procedure is fully completed.