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 1. 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 2. 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 3. 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 4. 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 5. 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 6. 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 7. 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 8. 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 9. 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 10. 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, 1994.
I promulgate this Law passed by the Seimas of the Republic
of Lithuania.
President of the Republic Algirdas Brazauskas