A major property developer reached out to us for assistance. Two subsidiary companies of the client’s group of companies ran into difficulties with liquidation and bankruptcy procedures. It was important for the client to minimize the risks of contestability of transactions of controlled companies, transferability of liability to the parent company and possible tax, criminal and administrative consequences of bankruptcy of companies within the group. We had several tasks. Due to the completion of a special construction project, it was necessary to liquidate the project construction firm in bankruptcy procedure. Moreover, we had to attain control over the course of the second firm bankruptcy, which was initiated by a tax authority.
We carried out legal and financial analysis of the activities of the first company, identifying and eliminating legal risks associated with a contest of a number of transactions. We developed step-by-step bankruptcy process plan and filed application for recognition of the debtor insolvent. During the procedure we made successful objections on a number of significant claims on the inclusion of creditors into the register and kept control over bankruptcy procedure. Moreover, we managed to collect over 85% of receivables that allowed for successful settlement with creditors of the company. For the second company, we managed to effectively hold negotiations with creditors. During the cause of bankruptcy of both companies we were successful in appointing bankruptcy commissioners proposed by us. Courts recognized our objections regarding the requirement of tax authority on inclusion in registers of both companies. As a result, debts owed to the budget was included in the register only partially.
Both procedures were completed within the timeframes set by the client and without any complications for debtors. The client saved over 50% of the project’s budget.