Analytics

From pre-trial rehabilitation to preventive restructuring: Local improvements have been introduced, but the challenge of involuntary debt write-offs persists

authors: Maxim Oleksiyuk, Alexander Shvorak, Volodymyr Tsiupryk

07 May, 2025 Exclusive

This article analyzes the legislative repeal of Ukraine’s pre-trial rehabilitation procedure (pre-bankruptcy reorganization) and its replacement with a new preventive restructuring mechanism introduced by Laws No. 4114-IX and No. 3985-IX, both effective as of January 1, 2025.

While the new framework introduces stricter regulation, enhanced judicial oversight, and safeguards to reduce abuse – such as creditor class voting and broadened definitions of “interested parties” – a fundamental issue remains unresolved: the law still permits partial or full debt write-offs against the will of dissenting creditors.

This raises legitimate concerns about potential violations of private property rights. The article argues that, although the preventive restructuring procedure represents progress in curbing opportunistic debtor behavior, the absence of creditor consent requirements for debt forgiveness undermines constitutional protections of ownership and may lead to unjust outcomes.

The full version of the article is available in Ukrainian by the link.

Full text is open only for the subscribers.

Enter

Views 367