External control as part of bankruptcy proceedings

liquidation of the enterprise is considered to be an extreme step used in full bankruptcy when help is already nothing.But before that, a variety of events aimed at the return of the solvency of the organization.These measures can be attributed to external management.

decision to start the procedure adopted by the arbitral tribunal on the basis of a petition filed by creditors of the organization.Also, the court shall appoint an external manager, which is responsible not only for the fulfillment of obligations to creditors, but also to restore solvency.As a rule, the maximum period during which carried out external control, one and a half years.Then the person in charge of a detailed report on the work carried out on the basis of which a decision on the extension or control, or to move to the next stage of the bankruptcy process.The initiator of this process may be a direct owner of the company, directly to the court stating that there are serious financial problems.

When you start the external control in case of bankruptcy, the head of the company be removed from office, and all the powers transferred to the designated manager.He has the right to restructure the company, conversion and modernization.Furthermore, it can significantly reduce the staff if it does not contradict the Labour Code.The head has the right to be informed of the changes.All developed temporary control measures must comply with the basic aim is to satisfy the requirements of contractors and to prevent the complete destruction of the company.The first collection of receivables carried out in full and then paid the debts increased significance.

In addition, external control assumes control of the authorized capital of the company.For example, it can be increased by increasing the nominal value of each share or quantity.Appointed to the position of the person in its sole discretion determine the procedure for repayment to creditors holding a meeting of directors of the company and are encouraged to develop measures to improve the financial condition of the company.

In addition, the control is responsible for the implementation of the core business, that is, he simultaneously has the right to enter into agreements with suppliers and contractors and continue to produce products or services.A month after being appointed arbitration control his man as head of the responsible person is obliged to submit a report on the planned innovations and results.In this document, you should define a period of time after which at a positive impact of all factors, the company can be considered restored.

External control can be terminated either by the court in the administration of the bankruptcy trustee, or at the conclusion of a peace agreement.