Without “Minding the Gap”
“Unlike many other countries in Central and Eastern Europe, Ukraine did not take any significant steps to improve its bankruptcy legislation in 2009. Contrary to expectations, the number of formal bankruptcy cases did not rise significantly either. However, of the companies that entered bankruptcy proceedings in 2009, less than 3% restored their solvency, while over 97% were liquidated. Gaps in bankruptcy legislation meant that the practice of abusing creditors’ rights has continued in 2009. For instance, asset stripping, followed by ‘express-bankruptcy’ in M&A asset deals, leading to ‘debt greenmail’ or misapplication of moratorium rules, became common practices. This forced creditors to watch the activities of debtors more closely and to take legal action at the earliest possible opportunity. So as to help creditors monitor insolvency notices and other publications in the official press, special databases and software programs have been designed. In 2009, the use of out-of-court restructuring also became a trend and stand-still agreements, although questionable under Ukrainian law, were signed by local borrowers and their creditors for the first time ever. It is likely that we will see some large, high-profile bankruptcy cases in 2010,” Taras Burhan, a senior associate with CMS Cameron McKenna, says.
The recent change in the economic climate has kept bankruptcy and restructuring at Vasil Kisil & Partners especially busy in 2009. A combined input of the firm’s strong expertise in litigation, corporate, banking and finance sectors adds considerable value to the services provided by attorneys in this field. Real estate, retail, transports, media and food production were the most active industries in this field. For instance, bankruptcy lawyers represented some creditors of a large food production plant in Vinnitsa Region and of the Black See Shipping Company in bankruptcy proceedings and in a number of related litigation cases. Counselor Yaroslav Teklyuk and associate Vjacheslav Peskov are key practitioners due to their bankruptcy expertise.
The main work of the legal practice of Vronskiy, Vronskaya & Partners is prosecutions with an in-depth bankruptcy specialty. Managing partner Anna Vronskaya is recognized as one of the best bankruptcy experts.
The Salkom law firm renders services on judicial and extra-judicial proceedings regarding restoration, reorganization or bankruptcy at all stages, namely: workouts and bankruptcy prevention, monitoring the economic condition of a potentially bankrupt debtor, representing creditors and debtors, taking steps to restore the debtor’s capacity to pay, protecting the client’s property interests during the disclosure, evaluation and sale of the bankrupt’s property. The firm collaborates with the State Bankruptcy Agency and has contacts with arbitrators and auditors. Andriy Kuznetsov is often noted by peers.
The bankruptcy of enterprises is the principal specialization of Vitaly Tytych, managing partner of Vitaly Tytych & Partners, who was frequently mentioned by peers.
Sayenko Kharenko brings tremendous experience to guiding clients in complex corporate bankruptcy cases, debt restructuring, and related litigation matters. In 2009 the firm handled the country’s largest restructurings of local instruments, cross-border secured and unsecured financings as well as international capital market instruments. The firm also advised clients with relation to the distressed sale of major Ukrainian companies. Sergiy Ignatovsky, Michael Kharenko, Nazar Chernyavsky formed a highly professional team at Sayenko Kharenko.
Due to the recent financial crisis, Magisters set up distressed assets, restructuring, and bankruptcy multi-practice group to help clients minimize risks and manage their business during the economic downturn. The group draws on the firm’s experience in bankruptcy and insolvency, including representing clients in proceedings before local courts.
Paritet Law Firm was recently involved in representing major gas company ITERA International Energy in court proceedings on debt recovery and insolvencies. Igor Kyrylyuk and Oleksii Domashenko were focused on this project.
DLA Piper recently advised Antonio Merloni, a global household appliances producer on different aspects of insolvency in Ukraine. The team also advised a well-known international bank on different aspects of insolvency in Ukraine, and on the creditors’ ranking procedure. Oleksandr Kurdydyk, a partner and head of finance and projects practice, as well as associates Rodion Ignatenko and Mykhaylo Byelostotskiy are experts in this area.
ENGARDE’s lawyers have considerable experience in providing legal support and advice to creditors’ committees, rendering services on drafting and conducting of analysis for recovery plans and settlement agreements. They regularly participate in disputes related to the insolvency of state companies and provide advice on financial reorganization of open joint-stock companies. Partners Andriy Vyshnevsky and Irina Nazarova and counsel Irina Drofenko come highly experienced in advising on bankruptcy and restructuring matters.
Gvozdiy & Oberkovych law firm has a proven record in advising clients on restructuring and insolvency law, including advising companies at the early stage of financial and operational restructuring, bankruptcy, advising on insolvency risks in structuring transactions, lender liability issues. Oleg Tarasiuk and Volodymyr Kushnir, led by partner Sergiy Oberkovych, undertook and participated in a wide variety of complex insolvency transactions and cases for secured and unsecured creditors, debtors and monitors, trustees and receivers. The team recently advised Ceskoslovenska obchodni banka, a.s. on the default of a project on constructing an electricity power plant. The representation included the debt restructuring procedure, analysis of loan agreement, pledge of property for an approximate value of EUR 15 million, storage of pledged property in warehouses of the State Customs Service of Ukraine, return of pledged property to the bank.
Among the latest highlights of Deloitte in Kiev is advising a major car manufacturer on the procedure for and consequences of the bankruptcy of car dealers. Viktoria Chornovol and Dmytro Pavlenko handled the procedure.
In 2009 INTEGRITES worked on 25 large-scale bankruptcy proceedings and 40 minor cases. For instance, the firm represented three long-term clients, Ukrainian banks, as creditors within several projects regarding litigation and bankruptcy. The client list also includes major foreign clients like KUKE S.A., ONDD and other clients — Ceramika Gres S.A (Poland), Basell Sales & Marketing Company B.V. (the Netherlands), MTC Mineral Trading Company GmbH (Austria), Lasselsberger a.s. (Czech Republic) on the territory of Ukraine, Russian Federation, Hungary, Latvia, Belarus, etc. in bankruptcy proceedings. INTEGRITES was involved in a USD 10 million bankruptcy case on behalf of OTP Bank. Anna Tyshchenko, Olena Varenyk, Artur Yalovyy were all named as leading firm bankruptcy lawyers.
The main recent highlight of LCF Law Group was protecting a client on being declared a bankrupt at the Supreme Economic Court of Ukraine. Yulia Bozhko and Nazaryi Turchenuck were part of the team that managed the process.
In 2009 Legal Alliance Company supported a purchase at exchange trading of industrial equipment of a factory under the bankruptcy procedure. Illya Kostin, Irina Pustovitenko and Dmytro Tytarenko offered professional legal services in related issues.
In 2009 Clifford Chance in Kiev was a visible player in provision of debt restructuring advice. The office advised a coordinating committee of lenders in connection with restructuring the debt of a Ukrainian metallurgical group; an international bank in connection with enforcement of its claim against a Ukrainian bank under temporary administration, etc. It also advised the Foundation for Effective Governance in connection with the drafting of a new insolvency law. Jared Grubb, a partner, Olexiy Soshenko, a counsel, Roman Stasiv, a senior associate, and Andrii Grebonkin, an associate, were all engaged in the named projects.
Lyubomyr Pitel and Bogdan Shapoval of Jurimex were involved in a case of Yuzhenergostroj’s bankruptcy on behalf of the latter of a total sum of USD 64.2 million.
Lavrynovych & Partners was deeply involved in the bankruptcies of debtors owing money to banks. The firm represented OTP Bank in cases involving around USD 3 million. Anton Lukovkin was named the key lawyer in corresponding legal practice.
ILF protected the interests of a large state-owned Kharkov-based enterprise in a dispute regarding its part in a bankruptcy. Olena Khytrova was named the key practitioner.
Peterka & Partners worked on giving comprehensive legal advice to Alta a.s., an international trading company specializing in supplying investment units for the engineering, metallurgy and energy industries, as a creditor with respect to its receivables declared in bankruptcy proceedings equal to about EUR 1 million. Monika Simunkova Hoskova controlled the process.
Solodko & Partners is the right firm to choose if protection from ungrounded complaints related to bankruptcy is necessary. Last year the firm represented a state transport enterprise in a similar situation.
In 2009 Jurvneshservice collaborated with creditors and worked on debt recovery of bankrupts announced or under announcement. Dmitry Salatiuk and Michael Shkabry were the key lawyers in this area.
Legal Consulting Centre, Voropayev & Partners, which is based in Donetsk, and the Dnipropetrovsk-based Dynasty law firm managed bankruptcy proceedings on the part of creditors as well as debtors.