On 25 April 2017, the President of the Republic of Azerbaijan signed a decree approving the Law on Amendments to the Bankruptcy Law (the Amendments).
The Amendments incorporate the definition of related parties to the debtor in accordance with the Civil Code of the Republic of Azerbaijan (the Civil Code). The related parties include the persons described in Article 49-1.1 of the Civil Code as well as individuals dismissed from the debtor's management bodies within one year prior to the beginning of bankruptcy.
According to the Amendments, the property administrator (the Administrator) may, among other things:
- enter into a loan agreement on behalf of the debtor
- apply to the court to restrict the debtor's disposal of property in case of the debtor's conclusion of underestimated deals (in comparison to other similar deals) that resulted in his/her insolvency, which effectively extends the Administrator's claw-back right
The Administrator's obligations are now further broadened as follows:
- he/she shall conduct an inventory of the debtor's assets
- he/she shall prepare a sales plan, call a creditors' meeting for its approval and take further actions in accordance with the approved sales plan, if the Administrator considers the sale of the debtor's assets appropriate for the creditors' interests
The sale of the debtor's capital assets shall be carried out at a public auction in accordance with the sales plan approved at the creditors' meeting or, where applicable, in other manners established by the Bankruptcy Law.
The Amendments also define the new rights in favor of the creditors during the bankruptcy:
- Creditors can make a request to the Administrator in respect of his/her report on the debtor's status or debtor's property not reflected in the report or any other matters relating to the Administrator's activity. In this case, the Administrator shall respond to the request within three business days.
- In addition to the debtor, the creditors may apply to the court at any time to suspend the bankruptcy for rehabilitation. The respective expenses in this case will be borne by the creditors.
- Creditors may dispute in courts the amount of their claims reflected in the list of creditors and the scope and legal basis of other creditors' claims.
Finally, as per the order of priority of claims, employees may now claim for payment of copyright fees.