Authorized translation Authorized translation REPUBLIC OF LITHUANIA LAW ON THE PROVISIONAL PROCEDURE OF BANKRUPTCY FOR ENTERPRISES PROCESSING AGRICULTURAL PRODUCTS July 15, 1993 No. I-227 Vilnius Article
- Objectives of the Law This Law shall regulate the relations which appear during the application of the bankruptcy procedure to enterprises processing agricultural products in cases when said enterprises delay effecting settlements with the suppliers of agricultural products. Article
- Initiation of Enterprise Bankruptcy Proceedings Under this Law, bankruptcy proceedings may be instituted by the Ministry of Agriculture or by an officially registered public organisation of agricultural producers. Article
- Conditions of Instituting Enterprise Bankruptcy Proceedings Under this Law, bankruptcy proceedings may be instituted if an enterprise fails, for a period exceeding 28 days, to effect payments to suppliers for supplied agricultural products. The court shall institute bankruptcy proceedings in accordance with an application filed by the entities specified in Article 2 who are initiating bankruptcy proceedings. Article
- Instituting Bankruptcy Proceedings in Court Enterprise bankruptcy proceedings shall be instituted by the court of the locality wherein the main office of the enterprise is located. Upon accepting the application of the initiators, the court, within 4 working days, must: 1) notify the enterprise in writing of the opening of the case; 2) give public notice of the opening of the bankruptcy case in the press of the locality wherein the main office of the enterprise is situated and over Lithuanian Radio, thereby specifying: the court which shall investigate the bankruptcy case and the number of the case; the requisites of the insolvent enterprise; and the date and place of the first court sitting. The Lithuanian Radio must accept such an announcement and must broadcast it during informational programmes and programmes for the countryside at least 3 times during the next 3 days; 3) notify in writing the entities who initiated the proceedings of the institution of the proceedings, presenting the information set forth in Par.2; and 4) appoint a liquidator of the enterprise. Article
- The Enterprise Liquidator The liquidator shall be the manager of an enterprise appointed for the period of investigation of the enterprise bankruptcy case and the liquidation of the enterprise. The rights and duties of the liquidator shall be specified in Articles 7 and 8 of the Law on Enterprise Bankruptcy of the Republic of Lithuania. Article
- Investigation of Bankruptcy Cases during Court Sittings Pursuant to this Law, a bankruptcy case must be brought before court no sooner than 30 days, and no later than 45 days, after appointment of the liquidator. Bankruptcy cases shall be dismissed if the enterprise produces adequate proof at the court sitting that there are no more suppliers of agricultural products to whom the enterprise has failed to pay debts for over 28 days since due date, or that it is not in the position to liquidate the remaining debts owing to technical reasons which are beyond the enterprise's control. If an enterprise is unable to liquidate its debts to suppliers of agricultural products, the court shall declare the enterprise bankrupt. Article
- Suspension and Dismissal of Cases on the Initiative of the Entities who Initiated Bankruptcy Proceedings If an enterprise takes appropriate actions to make settlements with the suppliers of agricultural products, the entities who initiated bankruptcy proceedings shall have the right to request that the court postpone the hearing for as many as 30 days. If the entity who initiated bankruptcy proceedings obtains ample proof that the enterprise has liquidated those debts to suppliers of agricultural products which matured before more than 28 days, it may terminate the bankruptcy proceedings. Article
- Legal Consequences of Bankruptcy The bankruptcy of an enterprise declared under this Law shall signify that from the day the adjudication order to declare the enterprise bankrupt is pronounced, the former owners of the enterprise shall lose ownership rights to the enterprise, whereas the rights of the provisional founder of the enterprise shall be delegated to the Ministry of Agriculture. The liquidator of an enterprise, in conjunction with the provisional founder, shall, within 45 days, perform all legal actions requisite for issuing shares of the enterprise and distributing them among suppliers of agricultural products. The shares shall be distributed in proportion to the enterprise's indebtedness to the agricultural product suppliers on the day of the pronouncement of the adjudication order to declare the enterprise bankrupt. Concurrently and within the same period, the liquidator of the enterprise, together with the provisional founder, shall announce the date and place for a meeting of shareholders. The meeting must be conducted in accordance with the requirements established in the Law on Stock Corporations of the Republic of Lithuania. Article
- Relations between the Enterprise and other Creditors All the liabilities of an enterprise which has been adjudicated bankrupt under this Law to its creditors other than agricultural product suppliers shall remain enforceable and shall be discharged in the general manner. Article
- Period of Validity of this Law This Law shall become effective within 21 days from the day of its promulgation, and bankruptcy procedures may be commenced until March 31,
- I promulgate this Law passed by the Seimas of the Republic of Lithuania. President of the Republic Algirdas Brazauskas