Insolvency process


Insolvency process – Within the meaning of the Corporate & Business Law in many countries this is a legal procedure started on the base of court decision against local corporate body due to its continuous non-possibility to meet their debts towards creditors, where the corporate body has more debts than available assets which might be used to pay them. The insolvency proceeding leads usually to the liquidation of the corporate body. Where the available assets of the debtor should go to public auction in order to pay back their creditors. The court will make the decision on the list of creditors on the basis of the presented documents.

At the beginning of the process, every creditor who is seeking repayment needs to prepare and submit all relevant documents. In some legal systems, the court appoints a trusted assignee to deal with all assets of the company. He/she will have to examine these submitted documents. The trusted assignee creates a list of accepted claims and passes it to the judge for review. The court is not bound to the initial list and can make changes in it. This is why in order to get positive results before the trusted assignee and before the judge, a well-grounded insolvency claim, supported with all needed proofs should be submitted.

See also “Receiver”

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