Miory Regional Executive Committee
In the first half of this year alone, 14 organizations in the Vitebsk Region that had previously faced difficult economic conditions have reduced their insolvency to a low level, and four others have improved their financial performance. The working capital of 78 municipally owned enterprises has been increased by 90 million rubles.
Deputy Chairman of the Regional Executive Committee Anzhelika Nikitina announced this during a round table discussion on the application of the provisions of the Law “On the Settlement of Insolvency”. She stressed that positive trends in preventing the bankruptcy and liquidation of enterprises have emerged specifically as a result of the implementation of this legislative act.
“The primary objectives of this legislation are to preserve businesses, stabilize the financial and economic status of enterprises, and retain workforce teams, rather than resorting to liquidation and bankruptcy,” Anzhelika Nikitina emphasized. “Insolvency settlement commissions operate under district and city executive committees and the Regional Executive Committee, and their authority over privately owned enterprises has been expanded regardless of staff size.”
The commissions provide consultative and other assistance to enterprises of both state and private ownership. As practice demonstrates, privately owned enterprises seek such assistance more frequently. To rehabilitate struggling enterprises, various mechanisms are employed, including settlement agreements concluded through the Regional Economic Court, debt restructuring, and capital contributions to charter funds. Financial recovery measures are also implemented at the enterprise level, such as addressing intra-group debts, which contribute to improved socio-economic development indicators and increased revenue.
“A mechanism that is being actively utilized is the reorganization of an enterprise through the transfer of its shares to a more successful company,” Anzhelika Nikitina noted. “For instance, this year the shares of JSC ‘Znamya Industrializatsii’ were transferred to the Orshanskiy Lnokombinat State Unitary Enterprise, resulting in debt restructuring and an increase in production volumes.”
The practice of the northern region regarding the resolution of insolvency, including judicial practice, is of interest to the entire republic. Vitebsk was not chosen by chance as the venue for the round table: in the region, the insolvency (bankruptcy) procedure is being utilized by current debtors; state bodies, including local administration and self-government, are taking an active stance regarding the use of insolvency resolution mechanisms to recover debts into the budget. Furthermore, the regional economic court has considered numerous cases that allow for specific conclusions, and indeed, the time has come to generalize judicial practice.
“For us, it is important that the law under discussion be thoroughly refined from the standpoint of legal drafting and writing style,” Deputy Chairman of the Supreme Court Yuri Kobets noted. “It is equally important that it function effectively in practice and be understood by all parties interested in the proper resolution of cases of this category. To this end, it is important for us to hear at the local level what questions arise among state bodies, enterprises, and representatives of legal entities.”
Representatives of state bodies, higher education institutions, judges, and insolvency practitioners were invited to participate in the round table. Following the event, materials will be prepared for consideration at the Plenum of the Supreme Court. Its thematic session will take place at the end of the year, and the outcome will be clarifications on all disputed issues regarding the application of the Law “On the Resolution of Insolvency”.
Yuri Kobets also held a public reception for citizens in Vitebsk and met with the staff of JSC “Vitebskie Kovry”.