Withdrawal of assets prior to bankruptcy: what the courts consider
Withdrawal of assets prior to bankruptcy: what the courts consider
The Ukrainian bankruptcy framework lies at the intersection of two principles: formal legality and fairness of distribution.
On the one hand, an entrepreneur is entitled to dispose of its property until it is officially declared bankrupt. On the other hand, creditors have a legitimate expectation to satisfy their claims from the debtor’s assets.
It is precisely at the boundary between these two approaches that the phenomenon of asset withdrawal arises — transactions that are formally lawful but economically questionable, depriving creditors of the opportunity to recover their funds.
Read more in the article by EVERLEGAL lawyers for LIGA ZAKON at the link.
In focus:
- Principles governing disposal of assets in bankruptcy
- Asset withdrawal: legal form and economic substance
- Judicial approach in 2024–2025: substance over form
- Subsidiary liability of controlling persons
- Burden of proof and presumption of fault
- Fraudulent transactions and the suspect period
- Abuse of rights in pseudo-commercial transactions
- Criteria of bad faith and invalidity of transactions
Our expert: Oleksandra Grachova, Junior Associate at EVERLEGAL
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