The procedure of financial restructuring provided for debtors whose activity is potentially promising, but they are experiencing temporary financial difficulties as a result of the rapid devaluation of the national currency, loss of markets, falling revenues and margins, says in his column the Deputy Minister of justice in the Executive service Sergiy Shklyar, who became Chairman of the Supervisory Board set up pursuant to the requirements of the law "On financial restructuring".
Now most of the lenders, or are unable to reach agreement on strategies to operate such joint debtors, without being a tool for the restructuring or settlement, conduct enforcement action to recover the debt that results in bankruptcy, the reduction of jobs and tax revenue and the stagnation of the economy. This is a vicious circle of problems.
The law "On financial restructuring" provides the opportunity and tools to keep these debtors by reducing the financial burden and restore their activity, provides tax incentives to debtors and banks, free banks from the sanctions for the violation of certain norms in the implementation of the restructuring plan and gives other benefits to the recovery of business activity.
Supervisory Board – a coordinating body in the procedure of financial restructuring. To start the process, the Council approves the regulations of its activities; provision of Secretariat; arbitration rules (for disputes in the procedures of financial restructuring); the requirements for independent experts to prepare reports on financial and economic activities of debtors; requirements and recommendations to the report of the independent expert on the review of the financial and economic activities of the debtor.
In addition, the Supervisory Board elects the composition and appoints the members of the Secretariat; members of the arbitration Committee (Chairman and two deputies); approves the list of arbitrators that can be appointed as sole arbitrators in adjudicating disputes in the procedures of financial restructuring.
The Supervisory Board was established from representatives of state bodies, Sergiy Shklyar (Chairman of the Supervisory Board and the Deputy Minister of justice), Yuri Gelati (Director of the Department of the Ministry of Finance), Vitaly vavrischuk (Director of the Department of the national Bank), Andrew Demchuk (Director of the Department of the Ministry of economic development and trade), as well as civil society representatives, delegated by the Verkhovna Rada Committee on financial policy and banking, – Valery Voshchevsky, Irina Wise, Olga bilay, Natalia Vasilets.
Was held an open competition for the selection of members of the Secretariat. Interviews were conducted in the presence of Independent Association of banks of Ukraine (NABU) and donors – the international financial organizations. Chairman of the Secretariat was Julia Kostecki, her Deputy – Andrey Borovik.
All regulations for work – requirements for independent experts the requirements and recommendations of the report of the independent expert, arbitration rules are approved and published on the website of the NABU. We are grateful to the ASSOCIATION because they provide logistical support for the establishment of the Secretariat – from the office to the site and regularly report on this to the Supervisory Board and the EBRD. In this case, the Memorandum of cooperation between the NABOO and the Supervisory Board provided that the NAB in any way will not interfere in the work of the Secretariat (i.e., workflow procedure). This non-interference in the Memorandum provided a limited access to the premises of the Secretariat, a separate provision of the documents (access to documents of the Secretariat alone) and other measures of information security. Therefore, all that relates to the production of documents from debtors and creditors, verification, organization, meeting of creditors, check the flow of timelines and so on – solely the responsibility of the Secretariat.
The selection process in the arbitration Committee's membership lasted from 30 December 2016 to 21 February 2017 (applications received at the official email address of the Council email@example.com). We received over 20 resumes and was struck by the fact that partners are recognized leaders of legal practice and the scientists interested in creating in Ukraine of the arbitral process, which would be consistent with international practice.
Already on March 2 the Supervisory Board by preferential voting approved the composition of artegenova Committee. The Chairman was Sergei Papernik, head of dispute resolution practice of PwC. Vice-Chairman of the arbitration Committee appointed Dmitry Shemelin (Advisor asters, which has considerable experience in arbitration procedures by different rules and specializiruetsya on international arbitration) and Yulia Kyrpa (partner at AEQUO, which is recognized as the best lawyer in Ukraine in the sphere of financial and banking law in the "TOP 50 law firms" publication "Legal practice" in 2016).
In accordance with the arbitration rules, the arbitration Committee submits for approval to the Supervisory Board a list of arbitrators for approval. The candidates into the list of arbitrators was declared in early February, the documents were accepted until the 28th. Now I have almost 50 applications, which will consider the arbitration Committee and make representation to the Supervisory Board.
In conclusion, I would like to add that Ukraine is not unique in its experience in the procedures of financial restructuring. This approach has been successfully applied in a number of countries, including the UK, Turkey, Serbia, Malaysia, other European and Asian countries. In Ukraine, this approach has been adapted to local realities and, hopefully, will become a real tool for preserving the prospective business and at the same time cleansing the balance sheets of banks from the "bad assets", but by getting rid of them and by restoring their good quality.