August 31, 2009

Now It’s Much Easier to Go Bankrupt in Ukraine

In May 2009 a 28-year-old real estate developer from Kharkiv, Artem Misyura, won a seminal case in the Supreme Court. His real estate development business as many others went bankrupt. So the entrepreneur filed for the bankruptcy of his privately-owned firm. Ukraine's Law on Bankruptcy would allow a liquidation of the private firm if the owner as a judicial entity took a responsibility for all firm's financial liabilities. Basically, the bankruptcy of the private firm was virtually a masochistic process because it would still hold you as an individual responsible for all loans, delinquent payments, etc. Moreover, it will affect your credit history so that you cannot start a new business or even take a loan to buy a car. However, Mr. Misyura who holds a Law Degree from Kharkiv Law School and his former classmates who are corporate lawyers filed a law suit to the Supreme Court where they requested a revision of the Law on Bankruptcy by appealing to the Constitution of Ukraine. And they won a case. As a result, any entrepreneur can file for the bankruptcy with his individual credit history staying intact. Ukraine's lawyers have already nicknamed the case after the entrepreneur. The Misyura Case is really a seminal change in Ukraine's Corporate Law that was a very convoluted and business-hostile piece of legislation. The Law on Bankruptcy was one of the major obstacles to the business in overcoming the current economic crisis. Since it's much easier to file for a bankruptcy and liquidate business, Ukraine's private sector might have a second wind to rebound from the economic crisis.

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