Annex I Designing a personal Bankruptcy Act—Brief Overview of Some Country Experiences
Annex II Fraudulent Bankruptcies—Excerpts of Some Country’s Legislation7
In early 2010 the Department of Enterprise Bankruptcy Management under the Ministry of Economy issued a “Review of Fraudulent Bankruptcies in Lithuania”. This report contains very valuable factual information and a thorough analysis of the implications that should serve as a basis for developing the required legislative changes in this area.
Article 20 of Lithuania’s Enterprises Bankruptcy Act reads as follows: “If the court investigating the enterprise bankruptcy case establishes a fraudulent bankruptcy, the administrator must review all contracts of the enterprise in bankruptcy concluded within the 5-year period prior to the institution of bankruptcy proceedings and bring an action before the court investigating the enterprise bankruptcy case for the invalidation of the contracts which are contrary to the interests of the enterprise and/or which could have contributed to its loss of ability to settle with creditors. In this case the administrator shall be deemed to have learnt of the contracts from the order to institute bankruptcy proceedings became effective.”
Article 209 of Lithuania’s Criminal Bankruptcy reads as follows: “A person who brings an undertaking to bankruptcy by deliberate mismanagement and thereby incurs major property damage to creditors shall be punished by imprisonment for a term of up to three years.”
Article 11(3)(8) of the Bankruptcy Acts states that the bankruptcy administrator has the obligation to “...examine the contracts of the enterprise in bankruptcy entered into within an at least 36 months period before the institution of bankruptcy proceedings and bring actions for the invalidation of the contracts which are contrary to the objectives of the enterprise activities and/or which could have led to the disability of the enterprise to settle with creditors. In this case the administrator should be considered to have found about the contracts from the effective date of the court decision to institute bankruptcy proceedings”.
Please not that these excerpts are not official translations and thus, might contain errors.