Skillful bankruptcy is an investment in the future.

© I. Tleulin


24 april 2020

Based on the functions and role of the temporary Manager in the bankruptcy procedure, his powers can be divided into two chronological periods. The first period from the initiation of bankruptcy proceedings in court to recognize the bankruptcy of the debtor, on which we elaborated in the previous article, the second period from the recognition by the court of bankruptcy until the appointment of a bankruptcy Manager.


If the court finds that the debtor's bankruptcy the main objective of the temporary Manager was drawing a conclusion about the financial stability of the debtor for the court, after the court decision on bankruptcy, the temporary Manager shall have the rights and obligations necessary for carrying out of procedure of bankruptcy until the appointment of a bankruptcy Manager.


Temporary Manager's duties and their terms


First of all, the temporary Manager must accept the documentation and property of the debtor. This obligation follows from the legal requirement for the debtor, who within 3 to 20 business days (w.d.) from the date of the decision on bankruptcy must transfer the documentation and property.


The law contains the following obligations of the temporary Manager, who from the date of the court's decision on bankruptcy must: (1) within 2 w.d.-send an announcement on the website of the authorized body about the debtor's bankruptcy; (2) within 3 w.d. - form a register of creditors ' claims and send it to the authorized body for publication on the website. (3) within 5 w.d. - if there are collateral creditors and property, send these creditors an offer to accept the pledged property in kind; (4) within 20 w.d. to hold the first meeting of creditors and carry out an appraisal of the mortgaged property, if available. At the first meeting of creditors, the temporary Manager submits a report on the inventory of the estate.


In addition, there are other obligations with a limited period of performance, linked to other events, so the temporary Manager must: (1) upon receipt of a request from a creditor or debtor, within 3w.d. to inform him about the progress of the bankruptcy procedure; (2) upon receipt of a judicial act affecting the interests of the debtor and creditors, submit a copy of it within 3 w.d. for consideration of the issue of appeal; (3) upon receipt of a claim from the creditor, review and notify it within 10 w.d. and, if necessary, make changes to the register of creditors ' claims; (4) after the appointment of a bankruptcy Manager, transfer to it all available documentation and property of the debtor within 3 w.d.; (5) in case of cancellation of the bankruptcy decision, transfer all available documentation and property to the debtor within 3 w.d.; (6) if the debtor's property is identified, the value of which may significantly decrease before the appointment of the bankruptcy Trustee, within 3 w.d. make a plan for the sale of this property and submit it for approval to the authorized body, after approval-to implement, according to the plan of sale.


After the bankruptcy court decision enters into force, the temporary Manager becomes the sole management body of the debtor and within 7 days must send a request to the authorized body about the availability, movement and balances of money on the debtor's Bank accounts.


It should be mentioned that if the debtor has ceased operations at the time of bankruptcy and there are employees on the staff, the temporary Manager must notify them of the further termination of the employment contract at least one month in advance, unless otherwise provided by the terms of the employment contract. With the written consent of employees, termination of the employment contract can be made before the expiration of the notification period.


The temporary Manager also forms and submits to the authorized body an initial report on the progress of the bankruptcy procedure, in the future, the report is submitted monthly by the bankrupt Manager.


Temporary Manager's rights


The temporary Manager has the right to request information about the debtor and its property from any state authorities or from individuals and legal entities. Also, in order to form a register of creditors ' claims, the temporary Manager has the right to request documents from creditors confirming their claims.


In addition to the above-mentioned rights, the temporary Manager can identify doubtful transactions of the debtor made during the three years before bankruptcy and apply to the court for their invalidation. Meanwhile, given the relatively short term of office of the temporary Manager: before the appointment of the bankrupt Manager and the transfer of all powers to him, there is no incentive to exercise this right.

Materials posted in this section of the website: (1)the subjective opinions of the authors; (2)not an official explanations and interpretations of the norms of Kazakhstani and International law; (3)relevant on a date of their publication; (4)exclusively informative and have recommendatory character; (5)Can be used in any form with the written consent of an authorized representative of "Tleulin and Partners" Law Firm or via the link to the website.