Best Restructuring & Insolvency Lawyers in Kaunas

About Restructuring & Insolvency Law in Kaunas, Republic of Lithuania

Restructuring and insolvency law in Kaunas, Republic of Lithuania is designed to provide a legal framework for businesses and individuals facing financial distress. The aim is to facilitate fair and orderly processes for debt recovery, business reorganization, or liquidation while protecting the rights of creditors and debtors. Lithuania, as an EU member state, also aligns its procedures with relevant European directives. Kaunas, as a significant economic center in Lithuania, is home to many enterprises and individuals who may need to navigate these procedures, whether for corporate restructuring, business recovery, or resolving insolvency.

Why You May Need a Lawyer

Legal advice is often crucial when dealing with restructuring and insolvency matters in Kaunas. Common situations where a lawyer can provide invaluable support include:

• When your business is facing financial difficulties and you are considering restructuring operations to avoid insolvency
• If you are a creditor seeking to recover debts from an individual or company showing signs of insolvency
• When you are unsure which process - restructuring or insolvency - would be most suitable for your circumstances
• If you want to dispute a debt claim or creditor's action
• When you are facing court proceedings related to insolvency or bankruptcy
• If you wish to understand the consequences of entering into insolvency or restructuring procedures
• When seeking to understand your rights and obligations under local and EU laws affecting insolvency and restructuring
• If you are an international business with assets or creditors in Lithuania

Local Laws Overview

Restructuring and insolvency procedures in Kaunas are governed primarily by the Enterprise Bankruptcy Law and the Law on Corporate Restructuring of the Republic of Lithuania. The insolvency legal framework includes:

• Bankruptcy proceedings: Initiated when a company is unable to pay its debts and is deemed insolvent. This can be voluntary (by the debtor) or compulsory (by creditors).
• Restructuring proceedings: Allow a financially distressed company to continue operations while reorganizing its debts and obligations, aiming to restore long-term viability.
• Personal insolvency: Available for individuals under certain conditions, aiming to offer a fresh start through structured repayment plans and ultimate discharge of debts.
• Creditor and debtor rights: Lithuanian law provides mechanisms to protect both creditors and debtors, including timely notifications, objection rights, and oversight by courts and appointed administrators.
• Administrator's role: In both restructuring and insolvency, a court-appointed administrator manages the process, representing the interests of all parties and ensuring legal compliance.
• EU Law application: Where cross-border issues arise, Lithuania applies relevant EU regulations, such as the Insolvency Regulation, to determine jurisdictions and recognize proceedings across borders.

Procedures must be followed meticulously, and the outcomes can have long-term impacts, such as restricting directorship or affecting future creditworthiness.

Frequently Asked Questions

What is the difference between restructuring and bankruptcy in Lithuania?

Restructuring aims to help a company restore solvency and continue operating by reorganizing debts, while bankruptcy (insolvency) leads to liquidation of assets to satisfy creditors and usually results in closing the business.

Who can file for bankruptcy or restructuring in Kaunas?

A business (or its creditors) can file for bankruptcy or restructuring. In the case of individuals, specific legal provisions apply for personal insolvency.

How long do restructuring and insolvency proceedings usually take?

The duration varies based on case complexity. Bankruptcy can last from several months to years, while restructuring processes may also take from months up to a few years, depending on the plan and negotiations.

Are directors personally liable for company debts?

Normally, directors are not personally liable for company debts. However, personal liability may arise in cases of fraud, gross negligence, or breaches of duties prior to insolvency.

What role does the court play in insolvency proceedings?

The court oversees initiation and conduct of procedures, appoints administrators, approves major decisions such as restructuring plans or asset sales, and resolves disputes.

Can creditors stop a restructuring or bankruptcy process?

Creditors can oppose certain decisions during the process and participate in creditors’ meetings but cannot unilaterally stop the proceedings once legally commenced.

What happens to employees in insolvency or restructuring?

Employees are protected by law, and unpaid wages or termination benefits generally have priority in creditor claims. In restructuring, efforts are often made to preserve jobs.

How are assets distributed in bankruptcy?

After paying administrative and procedural costs, assets are distributed according to a legal priority list, usually starting with secured creditors, then employees and state claims, and finally unsecured creditors.

Can foreign creditors recover debts in Lithuanian insolvency cases?

Yes, foreign creditors have the right to participate and file claims in Lithuanian insolvency proceedings, subject to the same rules as domestic creditors.

Can insolvency or restructuring prevent enforcement against my assets?

Upon opening of official insolvency or restructuring proceedings, individual enforcement actions (such as foreclosures) are usually suspended or prohibited, providing breathing space for negotiations and fair distribution of assets.

Additional Resources

For more information or assistance, consider the following resources related to restructuring and insolvency in Kaunas and Lithuania:

• Lithuanian Courts - for information on insolvency procedures and case status
• Register of Legal Entities (Juridinių asmenų registras) - for official company status and insolvency filings
• Lithuanian Bar Association (Lietuvos advokatūra) - for finding qualified insolvency and restructuring lawyers
• State Enterprise Center of Registers - for company records and public announcements
• Chamber of Bailiffs of Lithuania - for enforcement-related issues
• Ministry of Justice of the Republic of Lithuania - for access to laws and updates on insolvency regulation

Next Steps

If you are facing financial difficulties or are a creditor needing to recover debts in Kaunas, consider the following steps:

• Evaluate your situation by reviewing company or personal finances and gathering all relevant documentation
• Consult a local lawyer specializing in restructuring and insolvency to understand your rights, options, and obligations
• If appropriate, initiate structured communication with creditors or debtors to explore informal solutions
• If formal proceedings seem necessary, have your lawyer assist in preparing and submitting the required applications and supporting documents to the court
• Stay informed and involved throughout the process by participating in meetings and reviewing any legal notices or court decisions
• Consider long-term planning to prevent similar issues in the future, such as implementing better financial management or restructuring operations proactively

Seeking early legal advice can often prevent complications and offer a broader range of solutions in restructuring and insolvency matters.