LIETUVOS RESPUBLIKOS

LIETUVOS RESPUBLIKOS REPUBLIC OF LITHUANIA laW ON RESTRUCTURING OF ENTERPRISES 20 March 2001 – No IX-218 Vilnius (As last amended on 2 July 2010 – No XI-978) CHAPTER ONE GENERAL PROVISIONS Article 1. Purpose and Scope of the Law 1. This Law shall regulate the restructuring of legal persons.  2. The purpose of this Law shall be to provide conditions for legal persons in financial difficulties which have not discontinued their economic and commercial activities to maintain and develop these activities, to settle their debts and to avert bankruptcy. 3. The Law shall apply to all legal persons under restructuring, which are registered in the manner prescribed by legal acts of the Republic of Lithuania (hereinafter referred to as “enterprises”), except for the cases specified in paragraph 4 of this Article and other laws. 4. The Law shall not apply to budgetary institutions, political parties, trade unions, religious communities and associations, banks, the Central Credit Union and other credit unions, other credit institutions, insurance and reinsurance companies, management companies, investment companies with variable capital, closed-ended investment companies and intermediaries of public trading in securities. 5. In the course of restructuring, the provisions regulating the activities of an enterprise, waiver of creditors’ claims or part thereof, postponement of the time limits for the discharge of obligations, making of compulsory payments shall apply to the extent this Law does not provide otherwise. 6. This Law shall apply to the extent it does not contradict the Law of the Republic of Lithuania on Financial Collateral Arrangements and the Law of the Republic of Lithuania on Settlement Finality in Payment and Securities Settlement Systems. 7. The purpose of this Law shall be to ensure the application of the legal act of the European Union indicated in the Annex to this Law. Article 2. Definitions 1. Enterprise in financial difficulties means an enterprise unable to discharge its obligations and reduce losses which, without assistance rendered by creditors, would force it to terminate its activities and go bankrupt. 2. Creditor’s claims secured by pledge and/or mortgage means a creditor’s (holder’s of the pledge, mortgage provider’s) claims secured under a mortgage (pledge) transaction or on the basis of judicial pledge (hypothec) and in the event of failure to meet whereof the creditor of an enterprise (holder of the pledge, mortgage provider) shall have the right to demand, in accordance with the procedure laid down by this Law,  the sale of the pledged assets and satisfaction of his claims from the proceeds of the sale first. 3. Restructuring of an enterprise means the totality of procedures established by this Law which aim to maintain and develop the activities of an enterprise, settle its debts and avert bankruptcy through securing assistance of the creditors of the enterprise and application of economic, technical, organisational and other measures. 4. Enterprise restructuring administrator qualification exam (hereinafter referred to as the “qualification exam”) means the test of knowledge of a natural person seeking to acquire the right to provide enterprise restructuring administration services, based on the programmes approved by the Commission on Attestation of Bankruptcy and Restructuring Administrators (hereinafter referred to as the “Commission”).  5.  Enterprise restructuring administrator certificate means a document issued by the Ministry of Economy attesting to the qualification of a restructuring administrator. 6. List of persons providing enterprise restructuring administration services (hereinafter referred to as the “List”) means a list drawn up by the Government of the Republic of Lithuania or an institution authorized by it which includes legal persons established in the Republic of Lithuania and divisions (branches) (hereinafter referred to as “legal persons”) of legal persons of Member States registered in the Republic of Lithuania, entitled to provide enterprise restructuring administration services, as well as natural persons in possession of a restructuring administrator certificate.  The right to provide enterprise restructuring administration services shall be acquired from the date of entry on the List. 7. Enterprise restructuring proceedings means a civil case before the court regarding the legal relations arising from restructuring of an enterprise. 8. Compulsory payments means taxes, charges and fees provided for by tax laws of the Republic of Lithuania. 9. Current payments of an enterprise under restructuring (hereinafter referred to as “current payments”) means all the payments and fees necessary for ensuring the economic and commercial activities of an enterprise, including compulsory payments, made during restructuring of an enterprise, starting from the date of coming into effect of the court ruling to initiate restructuring proceedings. 10. Member State means a European Union Member State or a State of the European Economic Area (EEA). 11. Other concepts used in this Law shall be interpreted as they are defined in the Law of the Republic of Lithuania on Enterprise Bankruptcy and other legal acts regulating enterprise insolvency.  Article 3. Creditors of an Enterprise Creditors of an enterprise (hereinafter referred to as “creditors”) shall mean natural and legal persons entitled to request from the enterprise the discharge of its obligations and liabilities, as well as natural and legal persons for whom the time limits for the discharge of liabilities have not yet expired: 1) in the event of non-payment of compulsory payments – state institutions which have an obligation to collect them; 2) in the event of non-payment of salary and compensation for damage arising from employment relations – employees of the enterprise (successors thereof); 3) in the event of transfer of the obligation to compensate for damage due to accidents at work or contraction of an occupational disease to the State in the cases specified in the Provisional Law of the Republic of Lithuania on Damage Compensation in Accident at Work or Occupational Disease Cases – an institution authorized by the Government of the Republic of Lithuania; 4) in the event of non-repayment of loans granted from the funds borrowed on behalf of the State and loans granted with the State guarantee – the Ministry of Finance of the Republic of Lithuania or an institution administering the loan; 5) natural and legal persons upon the sale of agricultural products; 6) in the event of non-repayment of assistance granted from the EU funds – state institutions administering the EU funds; 7) other creditors. CHAPTER TWO INITIATION OF RESTRUCTURING Article 4. Conditions for Restructuring Restructuring may be initiated where:  1) an enterprise is in financial difficulties or there is a real possibility that it will be in financial difficulties within the next three months; 2) an enterprise has not discontinued its activities; 3) an enterprise is not in bankruptcy or has not gone bankrupt; 4) an enterprise was established at least three years before the date of filing of a petition to initiate enterprise restructuring proceedings;  5) at least five years have passed from the coming into effect of the court decision to close the enterprise restructuring proceedings, or the court ruling to terminate the proceedings on the grounds specified in subparagraph 2 and 3 of paragraph 1 of Article 28 of this Law.   Article 5. Guidelines of an Enterprise Restructuring Plan 1. The single-person or collegial management body (hereinafter referred to as the “management body”) of an enterprise complying with the provisions of Article 4 of this Law and seeking the initiation of its restructuring must prepare the guidelines of an enterprise restructuring plan (hereinafter referred to as the “guidelines”). The guidelines shall specify: 1) a short description of the current situation of the enterprise (the nature of activities, assets held and number of employees); 2) reasons behind the financial difficulties of the enterprise; 3) a list of creditors indicating: where the creditor is a natural person – the name, surname and address of the place of residence of the creditor; where the creditor is a legal person – the name and address of the registered office and/or place of operations; the amounts of claims, the time limits for the settlement thereof and measures of securing thereof; 4) suretyship, guarantees and other measures of securing the discharge of obligations which the enterprise has granted to third parties (with indication of the third parties and persons to whom credits have been granted by third parties: in case of a natural person – the name, surname and address of the place of residence;  in case of a legal person – the name, code and address of the registered office and/or place of operations; the amounts of credits granted to third parties and the amounts of suretyship, guarantees and other measures of securing the discharge of obligations); 5) information relating to the cases in which financial claims have been entered against the enterprise; 6) voluntary commitments of the enterprise to pay interest to creditors for the period from the date of coming into effect of the court ruling to initiate restructuring proceedings to the date of coming into effect of the court ruling to approve the enterprise restructuring plan (hereinafter referred to as the “restructuring plan”); 7) a preliminary business plan of the enterprise, providing for the measures specified in paragraph 2 of Article 12 of this Law; 8) an estimate of administrative expenses, including the amount of remuneration for the restructuring administrator, for the period from the date of coming into effect of the court ruling to initiate the enterprise restructuring proceedings to the date of coming into effect of the court ruling to approve the restructuring plan. 2. The guidelines may also include other information, likely to be of importance when initiating enterprise restructuring proceedings, relating to the current situation of the enterprise and the reasons behind the enterprise’s financial difficulties.  3. The guidelines shall be approved by the meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise.  The meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise shall adopt the decision specified in this paragraph in accordance with the decision-making procedure laid down in the law regulating the legal form of an appropriate legal person, and where such a law does not provide for this procedure – by 2/3 of votes of the participants of the enterprise present at the meeting.  Article 6. Petition to the Court on Initiation of Enterprise Restructuring Proceedings 1. Upon approving the guidelines, the meeting of participants of an enterprise or the owner thereof complying with the provisions of Article 4 of this Law or an institution exercising the rights and duties of the owner of a state or municipal enterprise shall endorse the candidate to the post of a restructuring administrator, proposed by the management body of the enterprise, and shall adopt a decision to apply to court for initiation of the enterprise restructuring proceedings. The meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise shall adopt the decision specified in this paragraph in accordance with the decision-making procedure laid down in the law regulating the legal form of an appropriate legal person, and where such a law does not provide for this procedure – by 2/3 of votes of the participants of the enterprise present at the meeting.  2. The management body of an enterprise shall, not later than within five working days of the date of adoption of the decision referred to in paragraph 1 of this Article: 1) notify in writing each creditor, persons to whom the enterprise has secured the proper discharge of its own or third parties’ liabilities through suretyship, guarantees or other measures of securing the discharge of obligations, as well as persons who have provided guarantees or other measures of securing the discharge of obligations for the enterprise, and the institution authorized by the Government of the Republic of Lithuania  specified in paragraph 3 of Article 15 of this Law, of the adoption of the decision specified in paragraph 1 of this Article, and send the copies of the documents specified in subparagraph 2 of paragraph 4 of this Article to the creditors and the institution authorized by the Government of the Republic of Lithuania specified in paragraph 3 of Article 15 of this Law; 2) file a petition with the court on initiation of the enterprise restructuring proceedings. The petition shall be filed with a regional court of the locality wherein the enterprise’s registered office is located in the manner laid down by the Code of Civil Procedure of the Republic of Lithuania. 3. The petition to the court shall specify the reasons due to which the initiation of the enterprise restructuring proceedings is sought, shall name the candidate to the post of a restructuring administrator, and shall indicate:  where the restructuring administrator is a natural person – the name, surname, number of a restructuring administrator certificate and the date of its issue, the address of the office and contact information; where the restructuring administrator is a legal person – the name of the legal person, the code of the legal person, the number on the List and the date of entry therein, the address of the registered office and contact information.  4. The petition on initiation of the enterprise restructuring proceedings shall be accompanied by the following: 1) documents certifying that the enterprise complies with the provisions of Article 4 of this Law; 2) the guidelines and the decision on approval of the guidelines by the meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise; 3) a copy of the set of financial statements for the previous financial year and a copy of the balance-sheet and profit (loss) statement for the period of the reporting financial year before the date of adoption by the meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise of the decision specified in paragraph 3 of Article 5 of this Law; 4) the consent of the restructuring administrator to perform enterprise restructuring procedures, which must indicate that he complies with the requirements of paragraph 2 of Article 21 of this Law and there are no obstacles established by other legal acts to prevent him from performing the enterprise restructuring procedures; 5) lists of bailiffs to whom writs of execution have been presented in relation to recovery from the enterprise or in relation to seizure of its assets, as well as lists of execution proceedings and courts examining the cases in which financial claims have been entered against the enterprise; 6) a list of seized bank accounts of the enterprise, specifying the account numbers and the particulars of the credit institutions in which the accounts have been opened; 7) other documents which may be of importance for initiation of the enterprise restructuring proceedings. Article 7. Initiation of Enterprise Restructuring Proceedings in Court 1. Upon receiving a petition to initiate enterprise restructuring proceedings, the court may: 1) put the management bodies of the enterprise, the chief accountant (accountant), the head of a structural division in charge of keeping of accounts or the head of an enterprise providing accounting services under an obligation to file with the court additional documents necessary for examination of the restructuring case; 2) summon to appear in court the participants of the enterprise, the owner thereof or representatives of an institution exercising the rights and duties of the owner of a state or municipal enterprise, members of the management bodies of the enterprise, the chief accountant (accountant) or the head of a structural division in charge of keeping of accounts or the head of an enterprise providing accounting services and other responsible employees, request written explanations relating to initiation of the restructuring proceedings; 3) in accordance with the Code of Civil Procedure of the Republic of Lithuania, apply provisional protection measures valid until the date of coming into effect of the court ruling to initiate enterprise restructuring proceedings or to refuse to initiate the proceedings. 2. The court shall adopt a ruling regarding the receipt of the petition on initiation of the enterprise restructuring proceedings. The court ruling regarding the receipt of the petition on initiation of the enterprise restructuring proceedings shall not be subject to appeal. The court shall, not later than on the next working day following the date of issuing the ruling in relation to the petition on initiation of the enterprise restructuring proceedings, send a copy of this ruling to persons specified in subparagraph 1 of paragraph 2 of Article 6 of this Law and to bailiffs specified in subparagraph 5 of paragraph 4 of Article 6 of this Law, as well as to the manager of the Register of Legal Entities. Where decisions have been taken in relation to the enterprise by the court and other institutions and writs of execution have been issued based thereon, upon the court ruling regarding the receipt of the petition on initiation of the enterprise restructuring proceedings, the assets (funds) held by the enterprise may be seized under these writs of execution, however the sale and/or recovery of these assets shall be suspended from the date of adoption of the court ruling regarding the receipt of the petition on initiation of the enterprise restructuring proceedings.  In the event that the bank accounts of the enterprises have been seized or are subject to other disposal restrictions, in its ruling regarding the receipt of the petition on initiation of the enterprise restructuring proceedings, the court must indicate that all the payments and fees necessary for ensuring the economic and commercial activities of the enterprise, including compulsory payments, irrespective of whether the accounts have been seized or are subject to other disposal restrictions, may be made from one or several specific accounts. Where it is specified that the payments be made from a seized account, the court ruling shall be forthwith sent to the Register of Property Seizure Acts. 3. The court shall, not later than within one month from the date of adoption of the ruling regarding the receipt of the petition on initiation of the enterprise restructuring proceedings, adopt a ruling to initiate the enterprise restructuring proceedings or to refuse to initiate the proceedings.  The court shall be entitled, for important reasons, to extend the time limit of preparation for examination of the enterprise restructuring case in court, but no longer than for one month. Where, in preparation for the examination of the case, the court decides to convene a preliminary sitting, such a meeting may only be held once. When instructing to convene a preliminary sitting, the court must comply with the time limits for adoption of the ruling to initiate the enterprise restructuring proceedings or to refuse to initiate the proceedings specified in this paragraph. 4. The enterprise restructuring proceedings shall be initiated where the court establishes that the enterprise complies with the conditions specified in Article 4 of this Law and the requirements of Article 5 of this Law have not been violated.  5. The court shall adopt a ruling to refuse to initiate the enterprise restructuring proceedings where: 1) in the course of examination of the petition, the court makes a reasoned conclusion that the enterprise does not comply with at least one of the conditions specified in Article 4 of this Law; 2) the requirements specified in Article 5 of this Law have been violated; 3) in the course of examination of the petition, the court makes a reasoned conclusion that the enterprise is insolvent and where there are other conditions to initiate bankruptcy proceedings as specified in the Republic of Lithuania Enterprise Bankruptcy Law, a petition on initiation of the bankruptcy proceedings must be filed with the court in accordance with the procedure established by the Republic of Lithuania Enterprise Bankruptcy Law. 6. The ruling on initiation of the enterprise restructuring proceedings or refusal to initiate the proceedings shall become effective within seven days from the date of adoption thereof unless an appeal has been filed. The ruling on the initiation of the enterprise restructuring proceedings is to be executed without delay, appealing against the ruling shall not suspend the enterprise restructuring. Where the court refuses to initiate the enterprise restructuring proceedings, the recovery and sale of the assets shall be renewed, and the provisional protection measures applied and other instructions adopted by the ruling regarding the receipt of the petition on initiation of the enterprise restructuring proceedings shall be repealed. 7. The enterprise restructuring proceedings shall be initiated and examined by contentious procedure in accordance with the procedure set forth by the Code of Civil Procedure of the Republic of Lithuania, except where this Law provides otherwise. 8. The ruling on initiation of the enterprise restructuring proceedings shall indicate: 1) the name, address of the registered office and code of the enterprise in respect of which the restructuring proceedings are initiated; 2) the appointed restructuring administrator: where the restructuring administrator is a natural person – the name, surname, number of the restructuring administrator certificate and the date of its issue, the address of the office and contact information; where the restructuring administrator is a legal person – the name of the legal person, the code of the legal person, the number on the List and the date of entry therein, the address of the registered office and contact information; 3) a period of time, of at least 30 calendar days but not exceeding 45 calendar days from the date of adoption of the court ruling on initiation of the enterprise restructuring proceedings, during which creditors have the right to put forward their claims which  arose before the date of initiation of the enterprise restructuring proceedings; 4) an estimate of administrative expenses, including the amount of remuneration for the restructuring administrator, for the period from the date of coming into effect of the court ruling to initiate the enterprise restructuring proceedings to the date of coming into effect of the court ruling to approve the enterprise restructuring plan (hereinafter referred to as the “restructuring plan”); 5) the dates of drafting and filing with the court of the restructuring plan; 6) the accounts of the enterprise which may be used for making current payments and the payments specified in subparagraph 6 of paragraph 1 of Article 5 of this Law irrespective of whether the accounts have been seized or are subject to other restrictions on the disposal thereof; 7) the discharge of voluntary commitments of the enterprise to the creditors until the date of coming into effect of the court ruling to approve the restructuring plan. 9. Where the enterprise restructuring proceedings are initiated while a petition on initiation of bankruptcy proceedings is being examined in court but a court ruling on the initiation of bankruptcy proceedings has not yet been adopted, the petition on initiation of the bankruptcy proceedings shall not be examined.  10. An enterprise shall acquire the status of an enterprise under restructuring from the coming into effect of the court ruling to initiate the enterprise restructuring proceedings.  The status of an enterprise under restructuring and the date of acquiring thereof shall be the data of the Register of Legal Entities. 11. Upon coming into effect of the ruling to initiate the enterprise restructuring proceedings, the court shall, not later than on the next working day, send a notification of the initiation of the enterprise restructuring proceedings and a copy of the court ruling to: 1) the restructuring administrator; 2) the enterprise; 3) the manager of the Register of Legal Entities; 4) the bailiffs to whom writs of execution have been presented in relation to recovery from this enterprise or in relation to seizure of its assets; 5) other courts examining the cases in which financial claims have been entered against the enterprise; 6) the institution authorized by the Government of the Republic of Lithuania specified in paragraph 3 of Article 15 of this Law, which shall inform about the initiation of the enterprise restructuring proceedings on its website. 12. Upon receiving the notification specified in paragraph 11 of this Article, the restructuring administrator shall, not later than within three working days, inform about the initiation of the enterprise restructuring proceedings the following: 1) creditors, persons to whom the enterprise has secured the proper discharge of its own or third parties’ liabilities through suretyship, guarantees or other measures of securing the discharge of obligations, as well as persons who have provided guarantees or other measures of securing the discharge of obligations for the enterprise; 2) all persons who have leased, borrowed or have the assets of the enterprise in custody or use or manage  them on other grounds; 3) state institutions which have an obligation to collect compulsory payments; 4) credit institutions and insurance companies providing services to this enterprise; 5) the meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of the state or municipal enterprise; 6) the administration of the municipality in the territory whereof the registered office of the enterprise under restructuring is located; 7) the Bank of Lithuania, where the enterprise restructuring proceedings have been initiated in respect of an enterprise included, in accordance with the procedure laid down by the Law of the Republic of Lithuania on Settlement Finality in Payment and Securities Settlement Systems, in the public list of participants of the systems; 8) the Ministry of Finance of the Republic of Lithuania or an institution administering the loan, where the enterprise restructuring proceedings have been initiated in respect of an enterprise which is the recipient of a loan borrowed on behalf of the State or a loan with the State guarantee; 9) the Securities Commission of the Republic of Lithuania, where the enterprise restructuring proceedings have been initiated in respect of a public limited liability company which is considered to be an issuer of securities under the Law of the Republic of Lithuania on Securities. 13. A court ruling to initiate the enterprise restructuring proceedings or to refuse to initiate the enterprise restructuring proceedings may be appealed against by filing a separate appeal. The separate appeal against the ruling to initiate the enterprise restructuring proceedings or to refuse to initiate the enterprise restructuring proceedings must be examined in the Court of Appeal of Lithuania not later than within 14 working days from the date of its receipt. Statements in response to separate appeals may be filed within 10 working days from the date of dispatch of a copy of the separate appeal to the parties involved in the proceedings. Upon reversing the ruling to refuse to initiate the enterprise restructuring proceedings, the Court of Appeal of Lithuania may not adopt a ruling to initiate the proceedings, but it may refer the case back to the Court of First Instance for a new consideration. The ruling of the Court of Appeal of Lithuania shall be final and not subject to appeal. Article 8. Liabilities of an Enterprise under Restructuring and Discharge of Liabilities in Respect of an Enterprise under Restructuring From the date of coming into effect of the court ruling to initiate the enterprise restructuring proceedings to the date of adoption of the court ruling to approve the restructuring plan: 1) it shall be prohibited to discharge all the pecuniary obligations which were not discharged before the date of coming into effect of the court ruling to initiate the enterprise restructuring proceedings, including the payment of interest, default interest and compulsory payments, to recover debts from the enterprise in judicial or extrajudicial proceedings, to apply judicial pledge, servitudes, usufruct, to offset claims, to pledge,  sell or otherwise transfer the assets of the enterprise necessary for continuation of its activities. The restrictions of this subparagraph shall not apply upon receiving the court authorization in the cases specified in paragraph 3 of Article 9 of this Law; 2) calculation of default interest and interest for all the liabilities of the enterprise which accrued before the date of coming into effect of the court ruling to initiate the enterprise restructuring proceedings shall be suspended, except for the calculation of late payment interest for delayed payment of salary due to the fault of the employer and other benefits related to employment relations, and, where the decision was adopted by a court ruling to initiate the restructuring proceedings, the voluntary commitments of the enterprise specified in subparagraph 6 of paragraph 1 of Article 5 of this Law; 3) recovery under writs of execution and set-off of claims shall be suspended. A bailiff shall, not later than within 15 calendar days from the date of adoption of the court ruling to initiate the enterprise restructuring proceedings, forward to the court examining the enterprise restructuring proceedings the writs of seizure and execution of the assets of the enterprise which were seized to ensure the execution of decisions of courts and other institutions prior to the initiation of the enterprise restructuring proceedings, but were not sold and shall inform thereof the custodian of the assets and the recoverer. A creditor’s claims which have not been satisfied by the bailiff shall be satisfied in accordance with the procedure laid down by this Law; 4) the enterprise under restructuring shall make all the current payments.  Article 9. Management of an Enterprise under Restructuring and the Assets Thereof 1. The management bodies of an enterprise shall, within their competence defined in the founding documents of the enterprise and other documents regulating the activities of the enterprise, in compliance with the restructuring plan and restrictions established in this Law and the court ruling, manage, use and dispose of all the assets owned or held in trust by the enterprise and manage the activities of the enterprise. The management body of the enterprise shall, within its competence, be responsible for the proper use of the funds of the enterprise for making current payments in the case specified in paragraph 2 of Article 7 of this Law and for the discharge of liabilities specified in subparagraphs 1, 2 and 4 of Article 8.  2. The activities of the management bodies of an enterprise in the course of restructuring shall be supervised by the restructuring administrator appointed by the court.  3. During the period of drafting of the restructuring plan, without the leave of the court: 1) it shall be prohibited to sell the enterprise or part thereof, its long-term assets or property rights; 2) it shall be prohibited to transfer the enterprise or part thereof, its long-term assets or property rights into the ownership of other persons, or to allow them to use the assets of the enterprise without remuneration; 3) the enterprise under restructuring may not grant guarantees, provide surety, pledge or secure the discharge of obligations of other persons in any other way. 4. Transactions concluded in breach of the requirements laid down in paragraph 3 of this Article shall be held invalid from the moment of their conclusion. 5. Members of the management bodies of the enterprise shall be held liable for damage caused to the enterprise and/or creditors in accordance with the procedure set forth by laws. Article 10. Simplified Procedure for Initiation of Enterprise Restructuring Proceedings 1. The enterprise restructuring proceedings may be initiated in accordance with a simplified procedure provided its restructuring plan is drawn up in accordance with the provisions of this Law prior to the filing with the court of a petition to initiate the enterprise restructuring proceedings. 2. When applying a simplified procedure for initiation of the restructuring proceedings, the management body of the enterprise shall file with the court, together with a petition to initiate the enterprise restructuring proceedings, the following: 1) the documents specified in subparagraphs 1, 3, 4, 5, 6 and 7 of paragraph 4 of Article 6 of this Law; 2) the decision of the meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise to apply to creditors for initiation of the enterprise restructuring proceedings and their approval of the restructuring plan; 3) the restructuring plan which must be approved by creditors whose amount of claims based on the data of the set of financial statements of the enterprise, in terms of value, makes up at least 2/3 of the amount of claims, in terms of value, of all the creditors. 3. Upon receiving the documents specified in paragraph 2 of this Article, the court shall, not later than within one month, examine them and adopt a ruling to initiate the enterprise restructuring proceeding, approve the restructuring plan and appoint a restructuring administrator (hereinafter in this Article referred to as the “ruling to initiate the enterprise restructuring proceeding”) or to refuse to initiate the enterprise restructuring proceedings. Where the court initiates the enterprise restructuring proceedings in accordance with a simplified procedure or refuses to initiate the proceedings, paragraphs 1–4 and 6–13 of Article 7 of this Law shall apply mutatis mutandis. The court shall adopt a ruling to refuse to initiate the enterprise restructuring proceedings in accordance with a simplified procedure: 1) on the grounds specified in subparagraphs 1 and 3 of paragraph 5 of Article 7 of this Law; 2) where the enterprise has violated the requirements specified in paragraph 2 of this Article.  4. It shall be considered that the ruling to initiate the enterprise restructuring proceedings specified in paragraph 3 of this Article shall also approve the claims of creditors. 5. The restructuring plan shall be implemented in accordance with the procedure set forth by this Law. Article 11. Provision of Information and a Commercial (Industrial) Secret 1. Information on the implementation of the restructuring plan shall be provided to the chairman of the meeting of creditors, creditors, and the meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise in accordance with the procedure established by the meeting of creditors. Upon the request of the court, the chairman of the meeting of creditors and the institution authorized by the Government of the Republic of Lithuania specified in paragraph 3 of Article 15 of this Law, the information relating to examination of the enterprise restructuring proceedings shall be provided by the restructuring administrator. 2. The information which constitutes a commercial (industrial) secret, but which is necessary for drafting of the restructuring plan and assessment of its feasibility, must be filed with the court, the chairman of the meeting of creditors and the restructuring administrator upon their request. This information shall be provided to the chairman of the meeting of creditors and the restructuring administrator upon their signing of a statement of confidentiality undertaking to keep the commercial (industrial) secret.  CHAPTER THREE RESTRUCTURING PLAN Article 12. Restructuring Plan and Duration of Restructuring 1. A restructuring plan must specify the following: 1) the aims and duration of restructuring; 2) the business plan of an enterprise for the period of restructuring, complying with the requirements of paragraph 2 of this Article; 3) a list of creditors, the amounts of their claims and time limits for the satisfaction thereof (in accordance with the sequence of and procedure for satisfaction of claims specified in Article 13 of this Law). The list of creditors shall also include persons who have lodged property claims against the enterprise with the court, but the court decisions in civil actions have not yet been adopted or have not yet come into effect, as well as persons in respect of whose credit claims separate appeals have been filed and have not yet been examined. The amount of claims of these persons shall be determined taking into consideration the amounts claimed by them. Upon coming into effect of decisions of other courts specified in subparagraph 5 of paragraph 11 of Article 7 of this Law, or upon adopting by a court of appeal a ruling on the confirmation of credit claims, the restructuring plan shall be revised accordingly; 4) the anticipated assistance of creditors with regard to the discharge of debt liabilities which arose before the initiation of the enterprise restructuring proceedings in court: extension of the time limits for the discharge of claims, waiver of claims (part thereof), replacement of a pecuniary obligation with another obligation (settlement from the assets and/or shares of the enterprise); 5) a list of debtors of the enterprise, including debtors in respect of whom judicial disputes or enforced recovery of debts are pending, which specifies the amounts of the rights of claim and methods of ensuring the discharge of obligations; 6) an estimate of administrative expenses, including the amount of remuneration for the restructuring administrator, for the period from the date of coming into effect of the court ruling to approve the restructuring plan to the date of coming into effect of the decision to close the enterprise restructuring proceedings or the ruling to terminate the proceedings;  7) other relevant information. 2. The business plan of the enterprise for the period of restructuring must establish the measures and time limits for the implementation thereof, including:  1) withdrawal from loss-making activities, diversification of activities, manufacture of new products (goods or services), existing or anticipated sale contracts and other future prospects of the enterprise; 2) the assets held or intended to be acquired by the enterprise, necessary for its activities; 3) the assets of the enterprise to be sold and/or transferred, the procedure of the sale and/or transfer of the assets, the anticipated income to be received and the use thereof; 4) the assets to be revalued or written off in accordance with the procedure prescribed by the legal acts of the Republic of Lithuania, the anticipated expenses and income relating thereto; 5) the contracts to be terminated, which were entered into before the date of initiation of the enterprise restructuring proceedings and the anticipated consequences of such termination; 6) the intended structural reorganisation of the enterprise, the number of employees dismissed or employed and the expenses relating thereto; 7) the amount of anticipated credits to be received, their terms and conditions, as well as methods of securing the implementation of credit agreements and other sources of funding; 8) other measures. 3. The duration of restructuring of the enterprise shall be established in the restructuring plan. Restructuring may not last longer than four years. The management body of the enterprise or the restructuring administrator may, by a decision of the meeting of creditors, file a petition with the court for extension of the enterprise restructuring period. The court or a judge may extend the duration of restructuring period, but not longer than for a period of one year. Article 13. Sequence of and Procedure for Satisfaction of Creditors’ Claims 1. A creditor’s claims secured by pledge and/or mortgage shall be satisfied first from the proceeds of the sale of the enterprise’s pledged assets. Where the proceeds of the sale of the pledged assets are insufficient, the remaining amount of unsatisfied claims shall be satisfied in the manner (second in line) specified in paragraph 4 of this Article. Where the restructuring plan does not provide for the sale of the pledged assets, creditors’ claims secured by pledge and/or mortgage shall be satisfied in the manner (first in line) specified in paragraph 3 of this Article, without exceeding the threshold value of the pledged assets determined by an independent property appraiser. The creditor’s (creditors’) claims secured by pledge and/or mortgage to the extent they exceed the value of the pledged assets which are not sold during the restructuring shall be satisfied in the manner (second in line) specified in paragraph 4 of this Article. 2. All creditors’ claims based on the sequence specified in paragraphs 3, 4, 5, 6 of this Article shall be satisfied in two stages. During the first stage, claims of creditors, without the calculated interest and default interest, shall be satisfied in accordance with the sequence established in this Article; and during the second stage – the remaining creditors’ claims  (interest and default interest) shall be satisfied according to the same sequence. 3. First in line for satisfaction shall stand claims of employees relating to employment relations (including income tax of individuals and state social insurance contributions); claims for compensation due to mutilation or other bodily injury, contraction of an occupational disease or death due to an accident at work; natural and legal persons’ claims for payment for agricultural produce purchased for processing and creditors’ claims secured by pledge and/or mortgage not exceeding the value of the pledged assets which are not sold during the restructuring. 4. Second in line for satisfaction shall stand all the remaining claims of creditors, except for the creditors’ claims specified in paragraph 6 of this Article, including claims for compulsory payments and loans granted from the funds borrowed on behalf of the State and loans granted with the State guarantee, or guarantee institutions the discharge of whose liabilities is guaranteed by the State, claims for assistance granted from the EU funds, and remaining creditors’ claims secured by pledge and/or mortgage which were not satisfied from the proceeds of the sale of the pledged assets and which exceed the value of the pledged assets not sold during the restructuring. 5. The claims of creditors who have granted credits not secured by pledge and/or mortgage specified in subparagraph 7 of paragraph 2 of Article 12 of this Law which arise following non-repayment of the credits by the enterprise within the time limits set in the agreements shall be satisfied before the creditors’ claims specified in paragraph 4 of this Article.  6. Third in line for satisfaction shall stand claims of participants of the enterprise under restructuring who became creditors of the enterprise prior to initiation of the restructuring proceedings and who alone or together with other participants control the enterprise under restructuring (who became creditors of the enterprise both directly and indirectly through parent enterprises or subsidiaries or through legal persons of other legal forms, on the adoption of decisions of the meeting of participants whereof they may have an influence (hereinafter referred to as “parent enterprises or subsidiaries“) not relating to employment relations.  7. During each stage, creditors’ claims of each successive sequence shall be satisfied following full satisfaction of the creditors’ claims of the preceding sequence of the respective stage. If funds are insufficient to satisfy all the claims of one sequence of one stage in full, the said claims shall be satisfied in proportion to the amount due to each creditor. 8. Claims of creditors for whom the time limits for the discharge of liabilities have not expired prior to initiation of the restructuring proceedings shall be satisfied not earlier than after the expiry of those time limits. Article 14. Consideration and Approval of the Restructuring Plan 1. The management body of an enterprise shall submit a draft restructuring plan to the meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise. Upon the approval of the draft restructuring plan by the meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise, the management body of the enterprise shall, within one working day, submit the draft restructuring plan to the restructuring administrator. The draft restructuring plan shall be submitted to the restructuring administrator at least one month before the deadline set by the court for filing of the draft restructuring plan with the court. The meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise shall adopt the decision specified in this paragraph in accordance with the decision-making procedure laid down in the law regulating the legal form of an appropriate legal person, and where such a law does not provide for this procedure – by a simple majority vote of the participants of the enterprise present at the meeting.  2. Upon receiving the draft restructuring plan approved in accordance with the procedure established in paragraph 1 of this Article, the restructuring administrator shall: 1) prepare a written conclusion on the feasibility of the draft restructuring plan (hereinafter referred to as the “conclusion”) and submit it to the management body of the enterprise; 2) coordinate with the management body of the enterprise the time and venue of the anticipated meeting of creditors regarding the approval of the draft restructuring plan. The meeting of creditors must be held at least 10 working days before the deadline for filing of the draft restructuring plan specified in paragraph 1 of this Article with the court; 3) inform in writing each creditor, persons to whom the enterprise has secured the proper discharge of its own or third parties’ liabilities through suretyship, guarantees or other measures of securing the discharge of obligations, as well as persons who have provided guarantees or other measures of securing the discharge of obligations for the enterprise and the institution authorized by the Government of the Republic of Lithuania specified in paragraph 3 of Article 15 of this Law about the time and venue of the meeting of creditors regarding the approval of the draft restructuring plan, and about the ways to access the prepared draft restructuring plan and the conclusion. This information must be provided at least 10 working days before the anticipated date of the meeting of creditors. 3. The meeting of creditors shall approve the draft restructuring plan if the creditors whose amount of claims, in terms of value, accounts for at least 2/3 of the amount of all the creditors’ claims confirmed by the court vote in favour of it.  4. The chairman of the meeting of creditors shall submit the minutes of the meeting of creditors to the restructuring administrator within five calendar days from the meeting. Upon receiving the minutes of the meeting of creditors who have approved the draft restructuring plan, the restructuring administrator shall, not later than within three working days, submit the minutes and the draft restructuring plan with the conclusion to the court.  5. The draft restructuring plan must be filed with the court for approval not later than within six months from the date of adoption of the ruling to initiate the enterprise restructuring proceedings. At the request of the restructuring administrator or the management body of the enterprise, the court shall be entitled to extend the time limit specified in this paragraph, but no longer than for one month. 6. Upon receiving the documents specified in paragraph 4 of this Article, the court shall, within 15 calendar days, adopt a ruling on the restructuring plan in accordance with the written procedure. The court ruling to approve the restructuring plan shall be final and not subject to appeal.  7. Where the draft restructuring plan, approved by the creditors, provides for State aid which is to be granted to the enterprise under restructuring and about which the European Commission must be notified in the cases set forth by legal acts of the European Union, the state institutions – creditors and other providers of State aid shall, within 15 calendar days from the date of adoption of a decision of the meeting of creditors on the approval of the draft restructuring plan, notify the European Commission, in accordance with the procedure laid down by legal acts, about the State aid to be provided under the restructuring plan. Copies of documents certifying that the European Commission received and registered the notifications concerning the provision of State aid shall be submitted to the restructuring administrator within five calendar days from their receipt. The restructuring administrator shall file these documents and the documents specified in paragraph 4 of this Article with the court within three working days from the date of receipt of the copies. The state institutions – creditors and other providers of State aid must submit the decisions of the European Commission concerning the provision of State aid to the enterprise under restructuring, the restructuring administrator and the court within five calendar days from the date of receipt of these decisions.   8. The meeting of creditors must, within five calendar days from the date of the meeting of creditors, return the draft restructuring plan for revision to the management body of the enterprise if the plan does not provide for measures to ensure the discharge of all the liabilities of the enterprise laid down in the restructuring plan, including the liabilities to the State relating to the loans granted from the funds borrowed on behalf of the State and loans granted with the guarantee of the State or guarantee institutions the discharge of whose liabilities is guaranteed by the State and the liabilities arising in the case of repayment of assistance granted from the EU funds. The draft restructuring plan shall be returned to the management body of the enterprise for revision also in the case specified in paragraph 9 of this Article.  Taking into account the comments and proposals expressed during the meeting or the decision of the European Commission, the management body of the enterprise shall, within 15 calendar days from the date of receipt of the decision adopted by the meeting of creditors, and in the case specified in paragraph 9 of this Article – within 15 calendar days from the date of coming into effect of the court ruling, submit to the meeting of participants of the enterprise, the owner thereof or an institution exercising the rights and duties of the owner of a state or municipal enterprise for approval a revised draft restructuring plan in accordance with the procedure set forth in paragraph 1 of this Article. The revised draft restructuring plan shall be submitted for consideration, considered and put to the vote in accordance with the same procedure as in the case of the initial version of the restructuring plan.  9. Where an application is made to the European Commission in the cases specified in paragraph 7 of this Article, upon receiving the documents certifying that the European Commission received and registered the notifications concerning the provision of State aid, the court shall, at the request of creditors, the restructuring administrator or the management body of the enterprise, suspend the enterprise restructuring proceedings until the decision of the European Commission is received. Where a positive decision of the European Commission is received, wherein no additional conditions concerning the provision of State aid are stipulated, or the decision stating that the measures to be undertaken are not considered to be State aid, the court shall decide whether or not to approve the restructuring plan. Where a positive decision of the European Commission is received, wherein additional conditions concerning the provision of State aid are stipulated binding on the enterprise under restructuring, or a negative decision of the European Commission is received, the court shall set an additional time limit, not shorter than 45 calendar days and not longer than 60 calendar days, for revising the draft restructuring plan in accordance with the procedure set forth in paragraph 8 of this Article and filing it with the court. In exceptional cases, the court shall have the right to extend this time limit, but no longer than for 30 calendar days. If the restructuring plan is not filed within the time limits set in this paragraph, the court shall adopt a decision to terminate the enterprise restructuring proceedings. 10. The management bodies of the enterprise and the restructuring administrator shall be responsible, within their competence, for the implementation of the restructuring plan approved by the court.  11. Amendments to the restructuring plan shall be considered and approved in accordance with the same procedure as the restructuring plan. CHAPTER FOUR RESTRUCTURING ADMINISTRATOR Article 15.  Restructuring Administrator 1. A restructuring administrator shall be a natural or legal person appointed by the court, entitled to provide enterprise restructuring administration services. 2. A restructuring administrator shall perform his duties under a contract for services provided against payment concluded with an enterprise, signed on behalf of the enterprise by the management body of the enterprise. Such a contract must be concluded not later than within 10 calendar days from the date of coming into effect of the court ruling to initiate the enterprise restructuring proceedings. The amounts of administrative expenses and remuneration for the restructuring administrator must be in compliance with the amounts approved by the court rulings. The expenses of the activities of the restructuring administrator shall be covered by the enterprise under restructuring. 3. An institution authorized by the Government of the Republic of Lithuania shall, in accordance with the procedure established in the Rules for Supervision of Activities of Restructuring Administrators, supervise the activities of a restructuring administrator, submit data on restructuring of the enterprise for publication in the supplement Informaciniai pranešimai to the official gazette Valstybės žinios, compile and manage a list of restructuring administrators and announce the list on its website.  In supervising the activities of the restructuring administrator, the institution authorized by the Government of the Republic of Lithuania shall, in accordance with the established procedure, perform inspections of the activities of the restructuring administrator and monitoring of the activities of the restructuring administrators. 4. A restructuring administrator shall be held liable for the damage caused to an enterprise and/or creditors pursuant to the laws of the Republic of Lithuania. The professional civil liability of an administrator shall be covered by compulsory insurance in accordance with the procedure established by the Government of the Republic of Lithuania.  5. Upon forfeiting the right to provide enterprise restructuring administration services, a restructuring administrator may not perform the enterprise restructuring procedures from the date of forfeiture of the right to provide enterprise restructuring administration services.  Article 16.  Requirements for Persons Seeking to Acquire the Right to Provide Enterprise Restructuring Administration Services 1. When seeking to acquire the right to provide enterprise restructuring administration services, a national of the Republic of Lithuanian or another Member State, any other natural person who benefits from the rights of movement within Member States conferred upon him by European Union legal acts must:  1) be of sufficiently good repute; 2) have higher university education; 3) have a work record of at least three years as a head of an enterprise over the last five years or have a work record of two years as an administrator of an enterprise in bankruptcy; 4) pass a qualification exam; 5) have a command of the Lithuanian language; 2. A natural person may not be regarded to be of sufficiently good repute if he: 1) has been convicted of a serious or grave crime, irrespective of whether or not the conviction has expired, or has been convicted of any other criminal act and the conviction has not yet expired; 2) has been dismissed from the office of a judge, a prosecutor, an advocate, an advocate’s assistant, a notary, a notary candidate (assessor), a notary’s agent, a court bailiff, a bailiff, a bailiff’s agent or a bailiff’s assistant for professional misconduct or misconduct in office, or has been dismissed from the office of a civil servant subject to a disciplinary sanction –  dismissal from the office or from work for a serious breach of duties, or the validity of his restructuring administrator certificate has been cancelled and less than three years have passed from the date of dismissal or cancellation of validity of the certificate; 3) abuses psychotropic, narcotic, toxic substances or alcohol; 4) does not comply with the requirements for administrators laid down in the Code of Conduct for Bankruptcy and Restructuring Administrators, which also apply in respect of a natural person who becomes a restructuring administrator. 3. The head of a legal person seeking to acquire the right to provide enterprise restructuring administration services must be entitled to provide enterprise restructuring administration services.  Seeking to acquire the right to provide enterprise restructuring administration services, a legal person must ensure that at least two employees of the legal person employed under a work contract, or the owner where the legal person is an individual enterprise, or a general member where the legal person is a partnership, hold a restructuring administrator certificate.  Article 17. Qualificat …