Банкеръ Weekly



How many years does it take a creditor to announce an insolvent debtor bankrupt? There is hardly a lawyer who could answer accurately to that question when the matter concerns a trade or industrial company (banks are adjudicated bankrupt under a quick procedures - within a month after depositing BNB's claim in court). United Bulgarian Bank (UBB) had to wait for five years until its debtor - the Sliven-based electric motors manufacturer Dynamo was announced insolvent. On March 14 the Sliven Regional Court rejected the rehabilitation programme proposed by Dynamo AD, terminated the operation of the enterprise and the rights of the its managerial bodies, and and ordered the trustee in banruptcy Snezhana Madjarova to begin cashing its assets. This act can be appealed at the Bourgas Court of Appeal, but the eventual protests of Dynamo AD and AKB Corporation (owner of a 67-percent stake in the enterprise) won't stop the work of the trustee in bankruptcy. Thus, after about half a decade UBB already has the opportunity to collecet at least part of its receivables of BGN19.8MN from its debtor Dynamo AD. The bank's receivables have been guaraneed by mortgages on the land and the buildings of Dynamo AD and by special pledges on the entyerprise's machines and equipment. The State Receivables Agency is next on the list of creditors with receivables exceeding BGN1.15MN. The other creditors of Dynamo AD are: Dynamo In OOD, Transimpex, Elma AD and Bimas AD - companies connected with AKB Corporation. Their aggregate receivables amount to BGN409,000.It is AKB Corporation that has tried to implement a financial scheme for gaining control on the general meeting of creditors of Dymano AD and thus accept a rehabilitation plan to its own liking. In the period between the opening of an insolvency procedure (October 30, 2002) until the enterprise was adjudicated bankrupt various firms connecetd with AKB Corporation (Dynamo In OOD among them) had offered UBB to buy out its receivables from the electric motors producer. The candidate-buyers's offers have not exceeded BGN1MN. A similar offer was moved in February 2003 by the Luxemburg company Swiss-Shem Trade, said to had been contracted as a mediator by AKB Corporation. The bank has flatly refused all offers for the purchase of its receivables from Dynamo AD. UBB can get about BGN3MN from the sale of the mortgaged land and buildings alone. The financial institution has received offers to that amount from potential buyers, ready to pay immediately. Had UBB accepted any of the proposals from the firms connected with AKB Corporation, the latter would had been Dynamo's biggest creditor. The bank's relentlessness has also given the State an opportunity to retain its interests. Had the firms controlled by AKB Corporation gained the upper hand in the general meeting of Dynamo AD's creditors, they would certainly had imposed the rehabilitation plan, proposed by the enterprise's managerial team. And the plan projected that repayment of the liabilities within at least ten years without any interest. Being the biggest creditor, UBB rejected that rehabilitation plan and the Sliven Regional Court did not accepted it for cinsideration. Initially, the magistrates had recommended Dynamo AD's managers to eliminate the lapses in it, namely: to reach an agreement with the company's creditors and more precisely with the Finance Ministry, and to present guarantees for the fulfillment of the repayment plan. As Dynamo AD's representatives failed to cope with the task within the term set by the court (February 18, 2003) a month later it adjudicated the company bankrupt.

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