Property rights of creditors of a legal entity that is in the process of termination

Abstract

The article reveals the problem of protection of the rights of creditors upon termination of a legal entity through its reorganization. Since the contractual relationship is an obligation, the property right of the creditor is the right to demand from the debtor to fulfill the property debt. In the context of the issues discussed in the article, this right has not ‘matured’ yet, that is, the creditor has not yet to make this claim. However, when a legal entity or a court makes a decision on its reorganization, creditors receive additional property rights in comparison with those that they had under the contracts entered into with the legal entity. First of all, it is the right to demand termination or acceleration of obligations, or enforcement of obligations, except in cases stipulated by law. Creditors exercise this right by applying to the Commission for the termination of a legal entity which has to make a final decision on this issue. If the creditor’s property claim was not satisfied by the commission, the obligations legal relationships of this creditor and a newly created in the process of reorganization legal entity are preserved. Meanwhile, if these relationships are, at the request of the creditor, changed by the Commission by ensuring that they are properly implemented, then the legal entity established in the process of reorganization, to which the property that is the subject of the pledge is passed by transfer act or separation balance sheet, will also be the legal successor. The legal entities created in the process of reorganization are jointly and severally liable for the debts of their predecessor, which ensures proper fulfillment of obligations.