On insolvency (LRU-763-son)

12.04.2022

Law of the Republic of Uzbekistan

Passed by the Legislative Chamber on August 16, 2021 Approved by the Senate on September 30, 2021

Chapter 1. Basic Rules

Article 1. Purpose of Present Law

The purpose of the present Law shall be the regulation of relations in the field of insolvency of legal entities and natural persons, as well as individual entrepreneurs.

The present Law shall not apply to state institutions and other non-profit organizations, with the exception of legal entities operating in the form of a consumer cooperative or public fund.

Article 2. Legislation on Insolvency

The legislation on insolvency shall consist of present Lawand other acts of legislation.

Where an international treaty of the Republic of Uzbekistan stipulates other rules than those provided for by the legislation of the Republic of Uzbekistan on insolvency, then the rules of the international treaty shall apply.

Article 3. Basic Concepts

The following basic concepts shall be applied in this Law:

bankrupt means a debtor recognized as insolvent on the basis of a court decision, in respect of whom the procedure of liquidation proceedings or the sale of property is applied;

homogeneous creditors mean a group of creditors who have uniform claims against the debtor and do not have an advantage over each other in satisfying them;

settlement agreement means an agreement of the parties to terminate the insolvency proceedings on the basis of mutual concessions;

creditors mean legal entities or natural persons to whom the debtor is liable for monetary obligations and (or) the fulfillment of duties on taxes and fees, with the exception of citizens to whom the debtor is liable for causing harm to life or health, as well as the founders (participants) of the debtor which is a legal entity liable for obligations arising from such participation;

representative of a meeting of creditors or a committee of creditors means a person authorized by a meeting of creditors or a committee of creditors to participate in an insolvency case;

monitoring procedure means the procedure applied by the court in an insolvency case to a debtor which is a legal entity, from the date of acceptance of an application for declaring a debtor insolvent until the next procedure in order to ensure the safety of its property, analyze the financial condition of the debtor, draw up a register of creditors' claims and hold the first meeting of creditors;

procedure for the sale of property means a procedure used in the framework of an insolvency case to adequately satisfy the claims of creditors in relation to a natural person;

moratorium means suspension of the execution by a debtor which is a legal entity of monetary obligations and (or) duties on taxes and fees;

monetary obligation means the obligation of the debtor to pay the creditor a certain amount of money under a civil law contract, as well as on other grounds;

taxes and fees mean obligatory payments which are paid to the State budget of the Republic of Uzbekistan and (or) state trust funds;

false insolvency means causing damage to creditors as a result of an announcement by a legal entity and a natural person, as well as an individual entrepreneur of the impossibility of fulfilling obligations under monetary obligations and (or) fulfilling duties on taxes and fees in full, knowing about their economic solvency for their fulfillment;

judicial manager (temporary manager, rehabilitation manager, external manager, liquidation manager, financial manager) means a person appointed by the court to conduct insolvency proceedings and who is a member of a public association of judicial managers;

judicial rehabilitation procedure means a procedure applied by the court to a debtor which is a legal entity to restore its solvency and pay off debts to creditors, without transferring the authority to manage the debtor's affairs to the rehabilitation manager;

pre-judicial rehabilitation means measures taken by the founders (participants) or the owner of the debtor's property which is a legal entity, creditors and other persons to restore the solvency and prevent the debtor's insolvency;

external management means the procedure for restoring solvency, applied by the court to the debtor which is a legal entity for its financial recovery, with the transfer of authority to manage the affairs of the debtor to an external manager;

liquidation proceedings means a procedure applied by the court to the debtor in order to adequately satisfy the claims of creditors and declare the debtor free from obligations and liquidate it, with the exception of a case on the insolvency of a natural person;

insolvency means the inability of the debtor recognized by the court to fully satisfy the claims of creditors for monetary obligations and (or) fulfill their duties on taxes and fees;

procedure for restoring solvency means a procedure applied by the court to a debtor which is a legal entity, that includes judicial rehabilitation or external management and provides for the implementation of measures aimed at restoring its solvency;

concealment of insolvency means causing damage to creditors as a result of the submission by a legal entity and a natural person, as well as an individual entrepreneur of information and documents that do not correspond to reality, distortion of financial statements or other deliberate concealment of one's insolvency;

debtor means legal entities and natural persons, as well as individual entrepreneurs who are not able to satisfy the claims of creditors for monetary obligations and (or) fulfill their duties on taxes and fees;

representative of the founders (participants) of the debtor or the owner of the property means a person authorized by the founders (participants) or the owner of the debtor's property in the course of the insolvency proceedings;

representative of the debtor's employees means a person authorized by the debtor's employees to represent their interests during the insolvency procedure;

debt restructuring procedure means a procedure used in the framework of an insolvency case to restore solvency in relation to a natural person and satisfy creditors' claims;

deliberate insolvency means the deliberate creation or increase of insolvency committed by a person who is a member of the management body of a legal entity, a founder (participant) or owner of a legal entity, as well as a natural person or an individual entrepreneur in the personal interests or interests of other persons;

agricultural enterprise means an agricultural cooperative, a farm and a dehkan farm with the formation of a legal entity, as well as other legal entities whose main activity is the production of agricultural products;

city-forming and equivalent enterprise means a legal entity whose employees make up at least half of the population of the corresponding settlement with taking into account their family members, or the number of employees is at least three thousand people, or which ensures the maintenance of the defense capability and security of the state, as well as of strategic importance or is a subject of natural monopolies.

Article 4. Current Payments

Current payments shall be deemed monetary obligations and (or) taxes and fees that have arisen since the date of commencement of the insolvency proceedings.

Creditors' claims for current payments shall not be reflected in the register of creditors' claims.

Satisfaction of creditors' claims for current payments in the course of insolvency proceedings shall be carried out in accordance with the first part of Article 150 of this Law.

Article 5. Signs of Insolvency

Signs of insolvency shall be deemed:

temporary insolvency — the inability of the debtor to satisfy the claims of creditors for monetary obligations and (or) to fulfill their obligations for taxes and fees as of the date of applying to the court, if the debtor has not fulfilled the relevant obligations within three months from the date of occurrence, and by the city-forming enterprise and enterprises equated to it — not fulfilled within six months;

permanent insolvency — if the debtor's obligations exceed the value of their assets on the date of filing an application with the court and in the reporting period at the beginning of the year in which the application was filed, and in the reporting period at the beginning of the previous year, if the application was filed by the debtor in the first quarter of the year.

The rules provided for by this article shall not apply when considering cases of insolvency in a simplified procedure, insolvency of natural persons, as well as an individual entrepreneur.

Article 6. Consideration of Insolvency Case

The insolvency case shall be considered by the court.

The insolvency case in accordance with Article 7 of this Law shall be considered by the court on the basis of an application of a person (body) entitled to apply to the court at the place of state registration of the debtor which is a legal entity, as well as at the place of residence of a natural person and (or) an individual entrepreneur.

Cases on the insolvency of the debtor shall be considered by the court according to the rules provided for by the Economic Procedure Code of the Republic of Uzbekistan, with taking into account the special considerations established by this Law.

Article 7. Right to Apply To Court

The debtor itself and the creditor shall have the right to apply to the court to initiate insolvency proceedings against the debtor in connection with the failure to fulfill monetary obligations.

The debtor and the creditor may indicate in the application for initiation of insolvency proceedings the need to apply procedures for restoring the debtor's solvency or liquidation proceedings.

The debtor itself, the state tax authorities shall have the right to apply to the court with an application for initiation of insolvency proceedings against the debtor in connection with his failure to fulfill its duties on taxes and fees, as well as the authorized state body for insolvency cases and its territorial departments (hereinafter referred to as authorized state body) in relation to legal entities in the authorized capital (charter fund) of which there is a state share and (or) debt to the Republic of Uzbekistan for monetary obligations.

Article 8. Grounds for Debtor to Apply To Court

The debtor shall have the right to apply to the court with an application to initiate an insolvency case if there are signs provided for in the first part of Article 5 of this Law.

The debtor, which is a legal entity, shall apply to the court with an application for initiation of insolvency proceedings against them on the basis of the decision of the founders (participants) or the owner of the property or the decision of the body authorized by the owner of the property, unless otherwise provided by this Law.

Article 9. Obligation of Debtor, Liquidation Commission or Liquidator To File Application With Court

The head of the debtor, which is a legal entity, the debtor, which is a natural person or an individual entrepreneur shall be obliged to apply for initiation of insolvency proceedings against the debtor to the court in cases where:

satisfaction of the claims of one or several creditors leads to the impossibility of the debtor to fulfill in full its monetary obligations to other creditors and (or) duties on taxes and fees;

body authorized to adopt a decision on the liquidation of the debtor in accordance with the constituent documents of the debtor, adopted a decision to apply to the court with the debtor's application for liquidation;

foreclosure on the debtor's property may render the debtor's economic activities impossible or lead to non-satisfaction of the claims of other creditors.

Where, during the liquidation of a legal entity, it becomes clear that it is impossible to satisfy the claims of creditors in full, the liquidation commission or the liquidator shall be obliged to apply to the court with an application to initiate insolvency proceedings against the debtor.

The application of the debtor, the liquidation commission or the liquidator must be sent to the court no later than one month from the moment the circumstances specified in parts one and two of this Article arise.

Article 10. Subsidiary Liability of Head of Debtor, Members of Liquidation Commission or the Liquidator for Failure to Fulfill Obligation to File Debtorʼs Application with Court

Failure by the head of the debtor, members of the liquidation commission or the liquidator to file with the court an application for initiation of insolvency proceedings against the debtor shall entail subsidiary liability of the head of the debtor, members of the liquidation commission or the liquidator for monetary obligations and (or) obligations for taxes and fees of the debtor that arose after the expiration of the period, provided for by paragraph three of Article 9 of this Law.

Article 11. Obligation to Provide Information On Economic Viability of Enterprises

In case of detection of signs of insolvency, the state tax authorities, the bodies of state statistics shall be obliged to submit to the authorized state body information on enterprises with a state share in the authorized fund (authorized capital), as well as other information on the economic viability of enterprises at the request of the authorized state body.

Chapter 2. Rights, Duties and Responsibilities of Participants in Insolvency Proceedings, Meetings of Creditors, Public Associations, Judicial Managers

Article 12. Creditors and Meeting of Creditors

When applying insolvency procedures, the interests of all creditors shall be protected by a meeting of creditors or a committee of creditors. From the date of acceptance by the court of an application for initiation of insolvency proceedings against the debtor, creditors shall not be entitled to apply to the debtor in order to satisfy their claims individually.

All actions performed in relation to the debtor shall be carried out by a meeting of creditors or a committee of creditors on behalf of the creditors.

A representative of the debtor's employees, a judicial manager, a representative of the founders (participants) of the debtors or the owner of the debtor's property shall participate in the meeting of creditors or the committee of creditors without voting rights.

In cases where a single creditor is involved in the insolvency case, the adoption of decisions related to the exclusive competence of the meeting of creditors shall be carried out by those creditor.

The exclusive competence of the meeting of creditors shall include the adoption of:

decisions to conclude a settlement agreement;

decisions on the election of members of the creditors' committee, determination of its quantitative composition and early termination of their powers;

decisions to apply to the court with a petition for the introduction of a judicial rehabilitation or external management procedure, the extension of their term or early termination;

decision to apply to the court for declaring the debtor bankrupt and initiating liquidation proceedings or declaring the debtor bankrupt and initiating liquidation proceedings without suspending its activities;

decisions on approval of the plan of judicial rehabilitation and approval of the debt repayment schedule;

decision to approve the external management plan.

The rules provided for by part five of this Article shall not apply when considering cases of insolvency of natural persons.

Decisions provided for in paragraphs four and five of part five of this Article, referred to the exclusive powers of the meeting of creditors, may be adopted on the basis of the opinion of a temporary manager on the financial condition of the debtor, provided for in part three of article 86 of this Law.

If the meeting of creditors adopts a decision to declare the debtor bankrupt and start liquidation proceedings, the court, with taking into account the opinion of the temporary manager on the possibility of restoring the debtor's activities, shall have the right to introduce in relation to the debtor one of the procedures for restoring its solvency.

The organization and conduct of the meeting of creditors shall be carried out by the judicial manager.

The meeting of creditors shall be deemed competent provided that it is attended by creditors with the right to vote, presenting claims in the amount of not less than two thirds of the total amount of monetary obligations and (or) obligations for taxes and fees of the debtor. Creditors may also participate in the meeting through their representatives. In the absence of a quorum, a repeated meeting of creditors shall be convened within ten days, which shall be competent regardless of the number of creditors represented at it, provided that they were duly notified of the date, time and place of the meeting of creditors.

The creditor shall have the right to appeal against the decision of the court that violates their rights and legitimate interests, the decision of the meeting of creditors, the actions (inaction) of the judicial manager, as well as the refusal of the judicial manager to satisfy their claims during the period of the procedure of their insolvency.

Article 13. Groups of Homogeneous Creditors

Homogeneous creditors shall be divided into the following groups:

the first — creditors for the debtor's obligations secured by a pledge;

the second — creditors for claims against the debtor arising from contracts not secured by pledge, contracts for the supply, performance of work and provision of services, as well as from contracts for compulsory insurance and insurance of bank loans;

the third — creditors for taxes and fees;

the fourth — creditors for remuneration and payment of compensation under employment contracts, executive documents providing for the transfer or release of funds from the account to satisfy claims for the recovery of alimony, for the payment of remuneration under copyright agreements, ensuring equal fulfillment of the debtor's obligations for payments and claims arising from labor and legal relations equivalent to them, as well as the claims of citizens for compensation for damage caused to their property as a result of a criminal or administrative offense;

fifth — the owners of the shares of the debtor on accrued dividends.

Creditors of the first, second and third groups shall have the right to vote at the meeting of creditors when considering the issues specified in paragraphs two and three of part five of Article 12 of this Law.

Creditors of the first and second groups shall have the right to vote at the meeting of creditors when considering the issues specified in paragraphs four , five , six and seven of part five of Article 12 of this Law.

A creditor shall have the right to vote at a meeting of creditors if they are holders of recognized claims against the debtor.

Article 14. Notification about Meeting of Creditors

Proper notification shall be understood as sending to a creditor, the relevant authorized body, as well as to another person who, in accordance with Article 12 of this Law, shall have the right to participate in a meeting of creditors, a notice of a meeting of creditors by post no later than two weeks before the date of the meeting of creditors or sending in another way, ensuring receipt of such a message at least five days before the date of the meeting of creditors.

If it is impossible to identify the information necessary for the personal notification of the creditor or other person entitled to participate in the meeting of creditors, or if there are other circumstances that preclude the possibility of personal notification of the said persons, the publication of a notice on holding a meeting of creditors in the manner determined by the Cabinet of Ministers of the Republic of Uzbekistan, and in the mass media determined by it shall be deemed proper notification.

The notice of the meeting of creditors must contain the following information:

name and location of the debtor which is a legal entity;

date, time and place of the meeting of creditors;

agenda of the meeting of creditors;

procedure for familiarization with the materials subject to consideration by the meeting of creditors;

procedure for registering participants in the meeting of creditors;

surname, name, patronymic and place of residence of the debtor who is an individual entrepreneur or natural person.

The judicial manager must create an opportunity for creditors to familiarize themselves with the materials to be considered at the meeting of creditors not less than three working days before the date of the meeting.

Article 15. Procedure for Convening Meeting of Creditors

The meeting of creditors shall be convened at the initiative of the judicial manager or at the request of the committee of creditors or at the request of creditors whose claims for monetary obligations and (or) obligations for taxes and fees amount to not less than one third of the total amount of claims for monetary obligations and (or) obligations for taxes and fees entered in the register of creditors' claims, or at the initiative of one third of the total number of creditors.

The request to hold a meeting of creditors must formulate the items to be included in the agenda of the meeting of creditors.

The judicial manager shall not be entitled to make changes to the wording of the items on the agenda of the meeting of creditors convened at the request of the committee of creditors or creditors specified in part one of this Article.

The meeting of creditors at the request of the committee of creditors or creditors referred to in the first part of this Article shall be convened by the judicial manager within a period not later than thirty days from the date of filing a relevant application with the judicial manager.

The meeting of creditors shall be held at the location (residence) of the debtor, unless otherwise established by the meeting of creditors or the committee of creditors. If it is impossible to hold the first meeting of creditors at the location (residence) of the debtor, the place of holding the first meeting of creditors shall be determined by the judicial manager.

Article 16. Protocol of Meeting of Creditors

Protocol shall be recorded at the meeting of creditors.

The protocol of the meeting of creditors must be accompanied by:

register of creditors' claims as of the date of the meeting of creditors;

documents confirming the powers of creditors' representatives;

registration lists of participants of the meeting of creditors;

materials submitted to the participants of the meeting of creditors for review and (or) approval;

evidence of proper notification of creditors and relevant authorized bodies about the date, time and place of the meeting of creditors;

voting ballots;

other documents at the discretion of the judicial manager or by the decision of the meeting of creditors.

The protocol of the meeting of creditors and the documents attached thereto shall be submitted to the court no later than two days from the date of the meeting of creditors.

Article 17. Procedure for Adoption of Decisions by Meeting of Creditors

Decisions of the meeting of creditors on items put to the vote shall be adopted by a majority of votes of the number of creditors present at the meeting and having the right to vote.

Each creditor having the right to vote shall have the number of votes in proportion to its share in the total accounts payable on the date of the meeting of creditors.

The meeting of creditors shall adopt by a majority vote of all creditors with the right to vote:

decision to conclude a settlement agreement;

decision to apply to the court with a petition for the introduction of a judicial rehabilitation or external management procedure, the extension of their term or early termination;

decision to apply to the court with a petition for declaring the debtor bankrupt and initiating liquidation proceedings;

decision to apply to the court for the appointment, replacement or dismissal of a judicial manager.

If there is not the necessary quorum of creditors with the right to vote at the meeting of creditors, for the adoption of the decisions provided for in paragraph three of this article, a repeated meeting of creditors shall be convened, which is authorized to adopt such decisions by a majority of votes from the number of creditors with the right to vote and present at the meeting, provided that the creditors were duly notified of the date, time and place of the meeting of creditors.

A decision of a meeting of creditors adopted in violation of the requirements of this Law and other legislative acts and violating the rights and legitimate interests of creditors may be declared invalid by a court upon the application of a creditor who did not participate in the voting or voted against this decision.

Such a decision of the meeting of creditors may be declared invalid by the court if it violates the rights and legitimate interests of other persons participating in the insolvency case. The application may be filed within twenty days from the day when the creditor and (or) another person participating in the insolvency proceedings learned or should have learnt about the decision.

The decision to apply to the court with a petition for the introduction of a judicial rehabilitation or external management procedure, the extension of their term or early termination shall be considered adopted if the majority of creditors of the first and second groups voted for it. In the event that the majority of creditors of the first and second groups voted against, and also when the required number of votes was not obtained in each group, a decision to apply to the court with a petition to declare the debtor bankrupt and start liquidation proceedings shall be adopted.

The creditors of each group who have the right to vote shall have equal rights to participate in voting.

Article 18. Register of Creditors' Claims

The register of creditors' claims shall be maintained by the judicial manager.

Recording of creditors' claims in the register of creditors' claims shall be carried out in the national currency of the Republic of Uzbekistan. Creditors' claims expressed in foreign currency shall be recorded in the register of creditors' claims at the official exchange rate of the Central Bank of the Republic of Uzbekistan as of the day of the meeting of creditors in the manner prescribed by legislation, unless otherwise provided in the agreement concluded between the creditor and the debtor. The register of creditors' claims shall contain information about each creditor, the established amount of their claims for monetary obligations and (or) obligations for taxes and fees, the order of satisfaction of each of their claims.

In the statement of claims, the creditor shall be obliged to indicate information about themselves, including the full company name, location (postal address), e-mail address (upon availability), personal identification number of a natural person, as well as bank details (upon availability).

A person whose claims are included in the register of creditors' claims must notify the judicial manager within one week of changes in information about them, as well as changes in the size and content of their claims against the debtor, including assignment of claims to third parties. If such information is not provided or is not provided in a timely manner, the judicial manager and the debtor shall not be liable for the damage caused in connection with this.

Creditors should be provided with the opportunity to familiarize themselves with the register of creditors' claims. At the request of a creditor or their representative, within five working days from the date of receipt of such request, the judicial manager shall be obliged to send to this creditor or their representative an extract from the register of creditors' claims on the amount, composition and order of satisfaction of their claims. The costs of preparing and sending such an extract shall be borne by the creditor.

Disagreements arising in the course of compiling the register of creditors' claims shall be considered by the court.

Article 19. Committee of Creditors

The Committee of Creditors shall represent the interests of creditors and exercise control over the actions (inaction) of judicial managers.

The committee of creditors shall include representatives of creditors in the number determined by the meeting of creditors.

If the number of creditors is less than twenty, the decision of the meeting of creditors may provide for the assignment of the functions of the committee of creditors to the meeting of creditors.

In order to carry out the functions assigned to it, the creditors' committee shall have the right to:

require the judicial manager to provide information about the financial condition of the debtor and the course of the insolvency procedure;

appeal to the court the actions (inaction) of the judicial manager;

elect a representative to participate in the insolvency case;

carry out other actions provided for by this Law and the plan of judicial rehabilitation or external management.

The Committee of Creditors shall have the right to adopt decisions:

on convening a meeting of creditors;

on recommending to the meeting of creditors to apply to the court for the appointment, replacement and dismissal of a judicial manager;

on approval or refusal to approve major transactions of the debtor and transactions of the debtor in which there is an interest.

When resolving issues at a meeting of the creditors' committee, each member of the creditors' committee shall have one vote. The transfer of voting rights by a member of the creditors' committee to another person shall not be allowed.

Decisions of the creditors' committee shall be adopted by a majority vote of the total number of members of the creditors' committee.

A representative of the debtor's employees, a judicial manager, a representative of the founders (participants) or the owner of the debtor's property may take part in meetings of the creditors' committee without the right to vote.

Article 20. Election of Committee of Creditors

Members of the creditors' committee shall be elected by the meeting of creditors for the period of judicial rehabilitation, external management and liquidation proceedings. By decision of the meeting of creditors, the powers of all members of the creditors' committee may be terminated earlier. Such a decision may be adopted with respect to all members of the creditors' committee simultaneously.

Candidates who receive the largest number of votes shall be considered elected to the committee of creditors.

The members of the creditors' committee may elect the chairperson of the creditors' committee from among their members.

If there are more than five members in the creditors' committee, then the chairperson of the creditors' committee shall be elected without fail.

Article 21. Interested Persons

Interested parties in relation to the debtor which is a legal entity shall be:

a legal entity that is parent or dependent in relation to the debtor in accordance with the legislation;

head of the debtor, as well as persons who are members of the supervisory board, the collegiate executive body, the chief accountant (accountant), including in cases of termination of the employment contract with them within one year before the initiation of insolvency proceedings;

founders (participants) of a legal entity or the owner of the debtor's property.

An interested person with respect to a natural person, including a debtor who is an individual entrepreneur, in this Law shall be meant their spouse, relatives in a direct ascending and descending line, sisters, brothers and their relatives in a descending line, parents, sisters and brothers of the spouse.

Interested parties in relation to judicial managers, creditors shall be determined in accordance with parts one and two of this Article.

Article 22. Judicial Managers

Persons with a higher education, work experience of not less than two years, as well as those who have passed attestation in an authorized state body, may be appointed as judicial managers.

A judicial manager may also be a lawyer who meets the requirements of part one of this article and has a license specializing in conducting civil and economic court cases.

The following may not be appointed as judicial managers:

interested parties in relation to the debtor or creditors;

persons with an incomplete or unexpunged conviction record;

persons recognized by the court as incapable;

individual entrepreneurs or natural persons in respect of whom the insolvency procedure has been introduced;

persons who earlier, while performing the duties of a judicial manager, caused damage to the debtor, creditors and did not compensate for those damage;

persons whose term of validity of the certificate of a judicial manager was terminated (annulled) and (or) temporarily suspended (for the period of temporary suspension of the validity of the certificate of a judicial manager) by decision of the authorized state body;

persons in respect of whom there are restrictions on the implementation of activities for managing the affairs and (or) property of other persons (persons deprived of the right to engage in such activities).

The court, according to the grounds specified in paragraph three of this article, shall refuse to appoint a candidate recommended for the judicial manager or release the judicial manager from performing duties if there is evidence submitted by the persons participating in the insolvency case.

The judicial manager must, within ten days from the date of their appointment by the court as judicial manager, insure their liability for the event of harm to the persons participating in the insolvency case.

The requirements specified in paragraph five of this Article shall not apply to judicial managers implementing the simplified insolvency procedure.

The meeting of creditors shall have the right to demand that the judicial manager conclude an insurance contract for the debtor's property.

Section 23. Rights and Obligations of Judicial Manager

The judicial manager shall have the right to:

convene a meeting of creditors;

demand the convocation of a committee of creditors in the cases provided for by this Law;

apply with claims and other applications to the court without prior payment of the state fee;

receive remuneration in accordance with Article 26 of this Law;

engage other persons on a contractual basis with payment for their activities at the expense of the debtor, unless otherwise established by agreement with creditors;

to use public services, including services provided through public service centers, without making advance payments;

receive free information from natural persons and legal entities (including credit institutions) and government agencies about the property, accounts and deposits of the debtor, including its credit cards, electronic balances and electronic money transfers;

request from the debtor, who is a natural person information about its activities to implement the plan for restructuring the debt of a natural person;

for fulfilment of its obligations, to receive free information from the state tax service and customs authorities, off-budget funds, registration authorities for real estate documents and other authorized bodies that have the necessary information about the debtor enterprise and its property;

apply to the court for early termination of the performance of their duties.

The judicial manager may also have other rights in accordance with the legislation.

The judicial manager shall be obliged to:

take measures to protect the debtor's property;

form and maintain a register of creditors' claims;

analyze the financial condition of the debtor;

to provide, at the request of the creditor, within ten days, information on the financial condition of the debtor and (or) their activities;

carry out actions and take measures to identify signs of false insolvency, concealment of insolvency or deliberate insolvency and report the identification of such signs to the meeting of creditors, the court, the authorized state body, as well as law enforcement agencies;

exercise control over the implementation of the debt restructuring plan of the debtor — a natural person;

control the timely full payment of funds to fully satisfy the claims of creditors by the debtor — a natural person;

fulfill the obligations imposed by judicial acts.

The judicial manager may have other duties in accordance with the legislation.

When conducting insolvency proceedings, the judicial manager shall be obliged to act reasonably in the interests of the debtor and creditors.

If the judicial manager has caused damage to the debtor, creditors and third parties due to non-performance or improper performance of the duties assigned to them, such damage may be recovered from the judicial manager in a judicial proceeding.

Article 24. Public Associations of Judicial Managers

Public associations of judicial managers shall be non-governmental non-profit organizations that unite judicial managers on a voluntary basis.

Public associations of judicial managers must develop and maintain the professional level of judicial managers and promote the protection of their professional interests.

Public associations of judicial managers shall:

participate in the development of draft normative legal acts regulating the activities of judicial managers;

protects the rights and legitimate interests of court administrators in their relations with state authorities and republican executive authorities;

request from state authorities and republican executive authorities the information necessary for the performance of its functions;

submit to the court a candidate for the position of a judicial manager in accordance with the procedure established by this Law;

develop and approve the rules of professional ethics of judicial managers;

carry out a rating assessment of the activities of judicial managers, monitor their compliance with the legislation, rules of professional ethics;

develop and submit for approval to the authorized state body training programs for judicial managers;

participate in certification (re-certification) of judicial managers;

study and analyze the activities of their members.

Public associations of judicial managers may also exercise other powers in accordance with the legislation.

Section 25. Liability of Judicial Manager

The judicial manager shall be liable in accordance with the law for failure to perform or improper performance of the duties assigned to them.

The persons participating in the insolvency case shall have the right to demand compensation from the judicial manager for damages caused as a result of their actions (inaction).

If the failure to perform or improper performance of the duties imposed on the judicial manager in accordance with Article 23 of this Law has caused damage to the debtor or creditors, this may serve as a basis for releasing the judicial manager from the performance of their duties.

Section 26. Remuneration for Judicial Manager

The amount and procedure for paying remuneration to a judicial manager for the performance of their function shall be established by the meeting of creditors, based on the amount of work performed, and approved by the court and paid out of the debtor's property, unless otherwise provided by agreement with creditors.

An applicant who has filed an application with the court for initiating insolvency proceedings against a natural person shall transfer to the deposit account of the court in advance funds in the amount of seven times the minimum size of labor payment for the payment of remuneration to the financial manager.

The funds transferred to the deposit account of the court shall be reimbursed at the expense of the property of the debtor, who is a natural person in the process of insolvency of a natural person in the manner prescribed by part two of Article 221 of this Law. In the absence of property of the debtor — a natural person, the remuneration to the financial manager shall be limited with the funds transferred by the applicant to the deposit account of the court, unless otherwise agreed at the meeting of creditors.

When applying the simplified insolvency procedure, unless otherwise agreed with the debtor, the costs of paying remuneration to the judicial manager shall be reimbursed by the applicant who has filed an application against the debtor to initiate insolvency proceedings. In this respect, an advance payment in the amount of seven times the minimum size of labor payment shall be made to the deposit account of the court to pay remuneration to the judicial manager. The judicial manager shall be paid remuneration for each completed case.

When insolvency is applied to a natural person and (or) the simplified insolvency procedure at the request of the state tax authority, the costs of paying remuneration to the judicial manager shall be reimbursed by the state tax authority that filed the application with the court at the expense of the State budget. In this respect, the amount of remuneration paid to the judicial manager shall be established by acts of legislation and paid in the manner prescribed by this Article.

If the costs of paying the remuneration to the judicial manager are not transferred to the deposit account of the court, the court shall return the application for initiating insolvency proceedings against the debtor.

When the debtor, who is a natural person applies to the court with an application to recognize them as insolvent, the court may postpone the transfer to the court's deposit account of the remuneration paid to the financial manager.

Disputes on the payment of remuneration to the judicial manager shall be considered by the court.

By decision of the meeting of creditors, an additional remuneration may be established for the judicial manager based on the results of their activities in cases where:

accounts payable included in the register of creditors' claims are fully repaid — in the amount of up to five percent of the amount of claims of the repaid debt;

more than seventy-five percent of creditors' claims included in the register of creditors' claims have been satisfied — in the amount of up to three percent of the amount of claims of these creditors;

more than fifty percent of creditors' claims included in the register of creditors' claims have been satisfied — in the amount of up to one percent of the amount of claims of these creditors.

The additional remuneration in the case under consideration shall not exceed half of the total amount paid to the judicial manager with respect to the given case.

If the debtor transfers from the solvency restoration procedure to the liquidation proceedings, no additional remuneration shall be paid to the judicial manager for this period.

Section 27. Expenses Related to Insolvency Case

Expenses related to an insolvency case shall be reimbursed at the expense of the debtor's property, unless otherwise provided by this Law.

In order to ensure the fulfillment of their rights and obligations, judicial managers may conduct payment to persons involved on a contractual basis, payment of court expenses, state registration of the debtor's rights to real estate, inventory, assessment of property, if necessary, expenses for using the services of an auditor, auction expenses, expenses for transfer, storage of documents, as well as other costs associated with the conduct of an insolvency case.

The amount of payment for the services of persons involved by a judicial manager in an insolvency case shall be established as a percentage of the balance sheet value of the debtor's assets (with the exception of expenses provided for in Article 26 of this Law) calculated in relation to the basis calculating amount (hereinafter referred to as the BCA), if the balance sheet value cost is:

up to a thousand BCA — in the amount of not more than twelve percent of the balance sheet value of the debtor's assets;

from one thousand to five thousand BCA — in the amount of not more than ten percent of the balance sheet value of the debtor's assets;

from five thousand to ten thousand BCA — in the amount of not more than eight percent of the balance sheet value of the debtor's assets;

more than ten thousand BCA — in the amount of not more than five percent of the balance sheet value of the debtor's assets. In this respect, expenses should not exceed two thousand two hundred times the size of the BCA.

For the purposes of this Article, the balance sheet value of the debtor's assets shall be defined on the basis of the financial statements as of the last reporting date prior to the initiation of insolvency proceedings.

In cases where it is impossible to define the actual balance sheet value of the debtor's assets, it shall be defined on the basis of the appraised value established by the appraisal organization. These rules shall not apply to judicial rehabilitation and external management procedures.

Information about the costs associated with the debtor's insolvency case shall be reflected respectively in the plan of judicial rehabilitation, external management and liquidation, as well as debt restructuring and sale of property.

Expenses associated with the sale of the pledged property shall be borne by the secured creditor, unless otherwise determined at a meeting of creditors or a meeting of a committee of creditors.

Chapter 3. Regulation of Insolvency Sphere

Article 28. Powers of Cabinet of Ministers of the Republic of Uzbekistan in the Field of Insolvency

Cabinet of Ministers of the Republic of Uzbekistan shall:

approve a unified procedure for submitting claims of the Republic of Uzbekistan as a creditor in insolvency proceedings for monetary obligations and (or) obligations for taxes and fees;

approve the certification procedure, qualification and professional requirements for persons acting as judicial managers, and the procedure for maintaining a unified register of judicial managers;

approve the procedure for the activities of judicial managers;

determine the procedure for the formation and use of the rehabilitation fund;

establish the procedure for the sale of property;

approve the regulation on the authorized state body.

The Cabinet of Ministers of the Republic of Uzbekistan may exercise other powers in accordance with the legislation.

Article 29. Powers of Authorized State Body

The Agency for Management of State Assets of the Republic of Uzbekistan shall be an authorized state body.

Authorized state body shall:

monitor the financial condition of enterprises, in the charter fund (authorized capital) of which there is a state share, in order to identify insolvent, unprofitable and economically insolvent enterprises and organize the formation of their electronic database;

apply to the court with an application to initiate a case on the insolvency of enterprises in the charter fund (authorized capital) of which there is a state share and (or) arrears to the Republic of Uzbekistan for monetary obligations;

conduct certification of judicial managers and maintain a unified register of judicial managers;

agree plans for pre-judicial rehabilitation, judicial rehabilitation and external management of enterprises in the charter fund (authorized capital) of which there is a state share;

exercise control over the course of pre-judicial rehabilitation and insolvency procedures of enterprises in the charter fund (authorized capital) of which there is a state share;

monitor the insolvency process;

exercise control over the activities of judicial managers in accordance with the legislation, apply to the court for the release of the judicial manager from the performance of duties if a systematic or single gross violation of the legislation is detected in their activities;

have the right to nominate candidates for judicial managers in the course of consideration of cases of a simplified insolvency procedure, as well as in the liquidation proceedings of enterprises in the charter fund (authorized capital) of which there is a state share;

impose fines on managers or other officials of enterprises, financial condition of which are monitored, for failure to provide or untimely provision of materials on the financial and economic activities of these enterprises;

exercise other powers in accordance with the legislation.

Decisions adopted by the authorised state body within the scope of its powers shall be binding on ministries, agencies, other republican executive authorities, as well as legal entities and individuals.

Chapter 4. Insolvency Procedures and Pre-judicial Rehabilitation

Article 30. Insolvency Procedures

When considering a case on the insolvency of a debtor which is a legal entity, the following procedures shall be applied:

observation;

judicial rehabilitation;

external management;

liquidation proceedings.

When considering a case on the insolvency of a debtor who is a natural person, the following procedures shall be applied:

debt restructuring;

bankruptcy and sale of property.

When considering a case on the insolvency of a debtor who is an individual entrepreneur, the procedure of liquidation proceedings shall be applied.

Article 31. Out-of-Court Procedures

Out-of-court procedures may include pre-judicial rehabilitation or voluntary liquidation (termination of activities) of the debtor.

Article 32. Ground for Pre-Judicial Rehabilitation

Pre-judicial rehabilitation shall be carried out before initiation of insolvency proceedings.

In the event of the appearance of signs of insolvency, provided for in paragraph one of Article 5 of this Law, the head of the debtor shall be obliged to notify the founders (participants), the debtor's governance bodies or the owner of the debtor's property in writing.

In order to prevent insolvency, before the filing of an application with the court by the founders (participants), the debtor's governance body or the owner of the debtor's property to declare the debtor insolvent, measures shall be taken aimed at the financial recovery of the debtor. Measures aimed at the financial recovery of the debtor may also be taken by creditors or other persons on the basis of an agreement concluded with the debtor.

Article 33. Object and Subjects of Legal Relations of Pre-Judicial Rehabilitation

The object of pre-judicial rehabilitation shall be the debtor which is a legal entity.

The subjects of pre-judicial rehabilitation may be the founders (participants) of the debtor which is a legal entity, the owner of the debtor's property, state bodies and other persons.

Article 34. Main Measures of Pre-Judicial Rehabilitation

The main measures of pre-judicial rehabilitation shall be:

full or partial redemption of overdue debts;

re-profiling of production for the manufacturing of competitive products;

attraction of highly qualified specialists;

training, retraining and advanced training of personnel;

provision of financial assistance by legal entities and natural persons interested in restoring the solvency of the debtor and continuing its activities;

agreement between the debtor and creditors aimed at reaching a consent between them on the deferment and (or) installment of payments due to creditors or a discount on debts in order to continue the activities of the debtor;

deferral of payment of taxes and fees and repayment of loans for the period of pre-judicial rehabilitation;

reorganization of the debtor which is a legal entity.

The pre-judicial rehabilitation procedure may include other measures.

Conducting pre-judicial rehabilitation with the provision of state support shall be carried out on the basis of a decision of a body authorized by the Cabinet of Ministers of the Republic of Uzbekistan.

The procedure for conducting pre-judicial rehabilitation with the provision of state support shall be regulated by legislation.

When carrying out pre-judicial rehabilitation with the provision of state support to the debtor, a rehabilitation account for sum and (or) foreign currency shall be opened in the servicing bank with the suspension of previously existing accounts. The procedure for using the rehabilitation account shall be determined by legislation.

Article 35. Terms for Pre-Trial Rehabilitation with Provision of State Support

Pre-judicial rehabilitation with the provision of state support to the debtor shall be introduced for a period of twelve to twenty-four months.

Article 36. Termination of Pre-Judicial Rehabilitation with Provision of State Support

The procedure of pre-judicial rehabilitation with the provision of state support may be terminated due to the establishment of its inefficiency.

Chapter 5. Consideration of Insolvency Cases in Court

Article 37. Grounds for Initiating Insolvency Case

An insolvency case may be initiated by a court if there are signs provided for by paragraph one of Article 5 of this Law, except for the cases provided for by this Law.

Insolvency proceedings shall be initiated on the basis of an application from creditors, a debtor and persons authorized by this Law.

The grounds for applying to the court with an application for initiation of insolvency case and applying one of the procedures for restoring solvency shall be the temporary insolvency of the debtor.

The grounds for applying to the court with an application for initiation of insolvency proceedings against the debtor and declaring it bankrupt, as well as for the commencement of liquidation proceedings, shall be the constant insolvency of the debtor.

Evidence confirming the validity of the creditor's claims, including a court decision that has entered into legal force, evidence of recognition of these claims by the debtor, a notary's writ of execution shall be the grounds for the creditor to apply to the court to initiate insolvency proceedings against the debtor and declare it bankrupt, as well as commencement of liquidation proceedings.

The grounds for filing an application by the state tax authority to initiate insolvency proceedings against the debtor shall be the measures taken to collect debts on taxes and fees.

Section 38. Persons Participating in an Insolvency Case

The persons participating in the insolvency case shall be:

debtor;

judicial manager;

creditors from the moment they present claims against the debtor in the manner prescribed by this Law;

authorized state body;

person who provided security for the obligations of the debtor.

A representative of the employees of the debtor-legal entity, a representative of the founders (participants) or the owner of the debtor's property, a representative of the debtor-individual entrepreneur, a representative of the meeting of creditors (committee of creditors) and other persons may participate in the insolvency case.

Persons participating in an insolvency case may apply to the court for an expert examination in order to identify the signs that led to false insolvency, concealment of insolvency or deliberate insolvency, in the course of any procedure applied in an insolvency case.

Article 39. Debtor's Application

The debtor's application for initiation of insolvency proceedings against them shall be submitted to the court in writing or electronically and signed respectively by the head of the debtor which is a legal entity, the debtor who is an individual entrepreneur, the debtor who is a natural person or their representatives.

In the debtor's application for initiation of insolvency proceedings against them, the following must be indicated:

name of the court to which the application is submitted;

name of the applicant (surname, name, patronymic) and their location (postal address), electronic mail (upon availability);

amount of creditors' claims for monetary obligations recognized by the debtor;

amount of the debtor's arrear for compensation for harm to the life or health of employees, labor payment and severance benefits payable to the employees of the debtor;

amount of remuneration payable under copyright agreements;

amount of debt on taxes and fees;

substantiation of the inability to satisfy creditors' claims in full;

information about claims against the debtor accepted for proceedings by the courts, as well as about executive documents presented for indisputable (non-acceptance) write-off;

information about the debtor's property, including monetary funds, receivables;

numbers of bank accounts of the debtor, postal address of the bank;

list of attached documents.

The application of the debtor-individual entrepreneur about their insolvency shall also contain information about the obligations of the debtor not related to entrepreneurial activity.

The debtor shall be obliged to send a copy of the debtor's application to creditors and other persons participating in the insolvency case. If prior to the submission of the debtor's application, a representative of the founders (participants) or the owner of the debtor's property, a representative of the debtor's employees are elected (appointed), then a copy of the debtor's application shall be also sent to these persons.

Article 40. Documents to be Accompanied to Application of Debtor

The application of the debtor to initiate insolvency proceedings against them, in addition to the documents provided for by the Economic Procedural Code of the Republic of Uzbekistan, shall be accompanied by documents confirming the existence of debt, as well as the inability of the debtor to satisfy the claims of creditors in full, other circumstances that were the ground for the application of the debtor.

The debtor's application for initiation of insolvency proceedings against them shall also be accompanied by:

constituent documents of the debtor — a legal entity, documents on state registration of a legal entity or an individual entrepreneur, as well as a copy of the passport of a natural person;

list of creditors and debtors of the debtor with a breakdown of accounts payable and receivables and an indication of the location (postal address), e-mail address (upon availability) of creditors and debtors of the debtor;

balance sheet or documents replacing it of the debtor — legal entity as of the last reporting date;

documents on the composition and value of the property of the debtor, who is a natural person or an individual entrepreneur;

decision of the founders (participants) or the owner of the property of the debtor — a legal entity with respect to the debtor's application to the court to initiate insolvency proceedings against them;

minutes of the meeting of the debtor's employees at which a representative of the debtor's employees was elected to participate in the consideration of the insolvency case, if such a meeting was held prior to filing an application for initiating an insolvency case.

The original or certified copies of the documents specified in parts one and two of this article shall be attached.

Article 41. Creditor's Application

The creditor's application to initiate insolvency proceedings against the debtor shall be submitted to the court in written or electronic form. The application of a creditor — a legal entity shall be signed by its head or representative, and the application of a creditor — a natural person or an individual entrepreneur — by this natural person or their representative.

The creditor's application to initiate insolvency proceedings against the debtor must contain:

name of the court to which the application is submitted;

name (surname, name, patronymic) of the applicant and their location (postal address), e-mail address (upon availability);

name (surname, name, patronymic) of the debtor and location (postal address), email address (upon availability);

amount of the debtor's monetary obligation to the creditor from which the claim arose, as well as the term for its execution;

evidence of the validity of the creditor's claims, including a court decision that has entered into legal force, evidence confirming the recognition of these claims by the debtor, a notary's executive inscription;

list of attached documents.

The creditor shall be obliged to send a copy of their application to the debtor.

Article 42. Consolidation of Creditors' Claims

A creditor's application for insolvency proceedings against a debtor may be based on a combined debt of various obligations.

Creditors shall have the right to combine their claims against the debtor and apply to the economic court with one application. Such an application shall be signed by creditors who have combined their claims.

Article 43. Documents to be Attached to Creditor's Application

In addition to the documents provided for by the Economic Procedural Code of the Republic of Uzbekistan, the application of the creditor to initiate insolvency proceedings against the debtor shall be accompanied by documents confirming the debtor's monetary obligations to the creditor, as well as the existence and amount of debt, in case of insolvency in a simplified procedure and insolvency of a natural person, evidence of payment of expenses for the payment of remuneration to the judicial manager shall be accompanied.

The application of the creditor, signed by the representative of the creditor, shall be accompanied by a power of attorney confirming the authority to sign the application.

The application of the creditor to initiate insolvency proceedings against the debtor shall also be accompanied by, upon availability:

decision of the court that considered the creditor's claims against the debtor;

writ of execution (writ of execution, payment claims accepted by the debtor, writ of execution by a notary, etc.) or evidence confirming the recognition by the debtor of the creditor's claims.

Article 44. Application of Authorized State Body

The application of the authorized state body to the court to initiate a case on the insolvency of an enterprise, in the charter fund (authorized capital) of which there is a state share and (or) debt to the Republic of Uzbekistan for monetary obligations, shall be submitted in writing or electronic form with accompanying the necessary documents confirming debtor's insolvency.

The application of the authorized state body shall be submitted to the court in compliance with the requirements provided for in Articles 41 and 43 of this Law.

Article 45. Application of State Tax Authority and Other Authorized Body

The application of the state tax authorities and other authorized body to initiate proceedings on insolvency with respect to taxes and fees against the debtor must satisfy the requirements provided for in Articles 41 and 43 of this Law.

The application of the state tax authorities and other authorized body on initiation of insolvency proceedings against the debtor must be accompanied by evidence of the adoption of measures to pay debt on taxes and fees in accordance with the legislation.

Section 46. Initiation of Insolvency Case

The judge shall decide the issue of accepting an application for initiating insolvency proceedings against the debtor or refusing to accept or return an application for initiating insolvency proceedings no later than five days from the date of receipt of the application.

The judge shall accept for proceedings an application for initiating a case on the insolvency of the debtor, filed in compliance with the requirements of the Economic Procedure Code of the Republic of Uzbekistan and this Law.

When accepting an application for initiating proceedings on the insolvency of the debtor, the judge may issue a ruling on the introduction of a monitoring procedure and the appointment of a temporary manager.

The court ruling on initiating an insolvency case shall be sent by the court to the state tax bodies and other authorized bodies, to the state executor at the location (residence) of the debtor. The debtor — a legal entity shall be obliged to send copies of the ruling on initiation of a case on its insolvency to the indicated persons (bodies) at the location of the representative offices and branches of the debtor.

The judge shall refuse to accept for proceedings an application for initiation of insolvency proceedings against the debtor if the condition provided for by paragraph one of Article 37 of this Law is violated.

The judge shall return the application for initiation of insolvency proceedings against the debtor, if the application does not meet the requirements provided for in Articles 39 — 45 of this Law. In cases where filing an application is mandatory for the head of the debtor and the application is not accompanied by the documents provided for in Article 40 of this Law, such an application shall be accepted by the court, and the missing documents shall be requested within the procedure of preparation of the insolvency case for court proceedings.

Article 47. Measures to Secure Creditors' Claims

The court, on the basis of the application of the person participating in the insolvency case, shall be entitled to adopt measures to secure the claims of creditors in accordance with the Economic Procedure Code of the Republic of Uzbekistan.

In addition to measures to secure the claims of creditors provided for by the Economic Procedure Code of the Republic of Uzbekistan, the court shall have the right to prohibit transactions without the consent of the judicial manager, oblige the debtor to transfer securities, currency values and other property for storage to third parties and take other measures aimed at ensuring the safety of the debtor's property .

Measures to secure the claims of creditors shall be valid until the court decides on the introduction of one of the insolvency procedures or until the court decides to refuse to declare the debtor bankrupt or until the court approves the settlement agreement.

The court shall have the right to cancel measures to secure the claims of creditors before the occurrence of the circumstances provided for by part three of this Article.

The court ruling on adoption of measures to secure the creditors' claims may be appealed (protested) by the persons participating in the insolvency case.

Article 48. Written Opinion of Debtor on Application for Initiation of Insolvency Proceedings Against the Debtor

The debtor, within five days from the date of receipt of the court ruling on accepting the application of the creditor, the state tax authorities or other authorized body on initiating an insolvency case shall have the right to send to the court, the applicant and other persons participating in the insolvency case, a written opinion with respect to application, as well as notify of the initiation of insolvency proceedings against them of all creditors not indicated in the application, unless other rules are established by this Law.

The written opinion sent by the debtor to the court must be accompanied by evidence of sending a copy of it to the applicant and other persons participating in the insolvency case.

The written opinion on the application for initiation of insolvency proceedings against the debtor must contain the information provided for by the Economic Procedure Code of the Republic of Uzbekistan. The absence of a written opinion of the debtor shall not prevent the consideration of the insolvency case.

Section 49. Preparation of Insolvency Case for Court Proceedings

The preparation of an insolvency case for trial shall be carried out by a judge in the manner prescribed by the Economic Procedure Code of the Republic of Uzbekistan, with the special considerations established by this Law.

The judge shall decide on the introduction of a monitoring procedure not later than five days from the date of receipt of the application for initiation of insolvency proceedings against the debtor.

If the debtor or the temporary manager or the state tax authorities or other authorized body has objections on the creditors' claims, the judge shall verify the validity of their objections.

The verification by the judge of the validity of the objections of the debtor or the temporary manager or the state tax authorities or other authorized body shall be carried out no later than one month before the end of the established period for consideration of the insolvency case.

Based on the results of consideration of the validity of the objections of the debtor or the temporary manager or the state tax authorities or other authorized body, the court shall issue a ruling on the inclusion or refusal to include creditors' claims in the register of creditors' claims. The ruling shall indicate the amount and order of satisfaction of the creditors' claims in respect of which the objections are recognized as unsubstantiated.

A court ruling based on the results of consideration of objections to creditors' claims may be appealed (protested against). An appeal (protest) against the said ruling shall not suspend its validity.

In order to determine the financial condition of the debtor when preparing an insolvency case for court proceedings, as well as when considering an insolvency case, the court shall have the right to appoint an expert examination.

Article 50. Terms of Consideration of Insolvency Case

The insolvency case must be considered at a court session within a time limit not exceeding two months from the date of the issuance of a ruling on accepting for processing an application for initiating a case on the debtor's insolvency. In exceptional cases, the consideration of the insolvency case may be extended for a period not exceeding one month.

Article 51. Judicial Acts on Insolvency Cases

Based on the results of consideration of the insolvency case, the court shall adopt one of the following judicial acts:

decision to declare the debtor bankrupt and commence liquidation proceedings;

decision to refuse to declare the debtor bankrupt;

ruling on the introduction of the procedure of judicial rehabilitation and the extension of its term;

ruling on the introduction of the external management procedure and the extension of its term;

ruling on termination of proceedings on insolvency case;

ruling on non-consideration of the application for initiation of insolvency proceedings;

ruling on the approval of the settlement agreement.

Judicial acts on an insolvency case shall be subject to immediate execution, unless otherwise provided by this Law. A copy of the judicial act on the case of insolvency shall be immediately sent by the court to the state executor at the location (residence) of the debtor.

Article 52. Decision on Declaring Debtor Bankrupt and Initiating Liquidation Proceedings

A court decision on declaring a debtor which is a legal entity bankrupt and initiating liquidation proceedings shall be adopted in cases where the signs of insolvency are established, provided for in part one of Article 5 of this Law, in the absence of grounds for introducing one of the restoration procedures for insolvency, approving a settlement agreement or terminating the insolvency proceedings.

The court decision on declaring a debtor which is a legal entity bankrupt and initiating liquidation proceedings must contain instructions on declaring the debtor bankrupt and initiating liquidation proceedings, appointing a liquidation manager and paying remuneration to them.

A court decision on declaring a debtor which is a legal entity bankrupt and initiating liquidation proceedings may be appealed (protested) by persons participating in the insolvency case, including any of the creditors, as well as by persons not involved in the case, with respect to whose rights and obligations the court adopted a decision.

The court decision on declaring the debtor-individual entrepreneur bankrupt and initiating liquidation proceedings shall indicate that the state registration of the debtor as an individual entrepreneur has become invalid.

Article 53. Publication of Information About Judicial Acts Issued by Court

Information on the rulings issued by the court on the introduction of monitoring procedures, judicial rehabilitation, external management, termination of insolvency proceedings, on the appointment, replacement or dismissal of a judicial manager, on the adoption of a decision on declaring a debtor which is a legal entity bankrupt and initiating liquidation proceedings, order on cancellation or amendments to these acts shall be published in the mass media. The list of mass media, the frequency and time limits of publication of the specified information, the prices for the services provided and the procedure for financing shall be established by the Cabinet of Ministers of the Republic of Uzbekistan.

The judicial manager, within three days from the date of receipt of the relevant judicial act, shall send the announcement provided for in paragraph 1 of this Article to the mass media.

Information about judicial acts sent for publication shall be published within three days from the date of their receipt.

Reimbursement of expenses associated with the publication of the information specified in part one of this article shall be carried out at the expense of the debtor's funds, unless otherwise provided by this Law or by a decision of a meeting of creditors or a committee of creditors. In the absence of funds from the debtor, payment for the publication of such information shall be made at the expense of the applicant who filed an application with the court for initiating an insolvency case, with subsequent reimbursement of these funds at the expense of the debtor's property.

If the debtor does not have property sufficient to reimburse the costs of publication, it shall be carried out at the expense of the applicant who applied to the court with an application to initiate insolvency proceedings against the debtor.

Information about judicial acts issued by the court may also be published in other mass media.

Article 54. Publication of Information On the Course of Insolvency Proceedings

Information on the course of insolvency procedures shall be subject to mandatory publication in the mass media.

Reimbursement of expenses related to the publication of information on the course of insolvency proceedings shall be carried out at the expense of the debtor's property, unless otherwise provided by this Law. If the debtor does not have property sufficient to cover the costs of publication, it shall be carried out in accordance with the decision of the meeting of creditors or the committee of creditors.

If the number of the debtor's creditors is more than fifty or their number cannot be determined, information on the commencement of each insolvency procedure applied to the debtor shall also be subject to mandatory publication in the mass media.

On the basis of a decision of a meeting of creditors or a committee of creditors, information subject to mandatory publication may also be published in other mass media.

Published information on the course of insolvency proceedings must contain:

name (surname, name, patronymic) of the debtor and its location (postal address), e-mail address (upon availability);

name of the court that adopted the judicial act, the date of adoption of such a judicial act and an indication of the name of the insolvency procedure introduced, as well as the number of the insolvency case;

surname, name, patronymic of the appointed judicial manager and their postal address, e-mail address (upon availability);

date set by the court for the next court session to consider the insolvency case;

information about the possibility of applying to the judicial manager of persons who have expressed a desire to pay off the debtor's debt;

other information in cases provided for by this Law.

Article 55. Court Decision on Refusal To Declare Debtor Bankrupt

The decision of the court to refuse to declare the debtor bankrupt shall be adopted in the following cases:

failure to establish signs of insolvency;

satisfaction of the stated claims of creditors before the court adopts decision on the insolvency case;

establishment of false insolvency.

A court decision to refuse to declare a debtor bankrupt may also be adopted in other cases provided for by this Law.

If there is evidence indicating that the debtor has a sufficient amount of liquid property, the court shall be entitled, at the debtor's request, to postpone the consideration of the insolvency case, suggesting that the debtor pay off the creditors' claims within the period established by the court, which cannot exceed thirty days.

Article 56. Consequences of Decision to Refuse to Initiate Proceedings on Insolvency of Debtor

The adoption by the court of a decision to refuse to initiate proceedings on the insolvency of the debtor shall be the ground for the termination of all restrictions that are a consequence of the acceptance of an application to initiate proceedings on the insolvency of the debtor and (or) the introduction of a monitoring procedure.

Article 57. Grounds for Terminating Insolvency Proceedings

The court shall terminate the insolvency proceedings in case of:

restoration of the debtor's solvency in the course of the judicial rehabilitation procedure;

restoration of the debtor's solvency in the course of the external management procedure;

conclusion of a settlement agreement;

refusal of all creditors participating in the insolvency case from the declared claims;

satisfaction of all claims of creditors included in the register of creditors' claims in the course of any insolvency procedure.

The court may terminate the insolvency proceedings in other cases in accordance with the law.

The judicial manager within three working days from the date of issuance of the court ruling on termination of the proceedings on the insolvency case shall notify the state tax authorities of this ruling in writing.

Section 58. Suspension of Insolvency Proceedings

Proceedings on the insolvency case may be suspended on the grounds provided for by the Economic Procedure Code of the Republic of Uzbekistan.

Suspension of insolvency proceedings shall not prevent the court from considering applications and complaints against the actions (inaction) of the judicial manager, as well as those with respect to disagreements regarding the size, composition and order of satisfaction of creditors' claims.

In the event of suspension of proceedings on the insolvency case, the court shall not be entitled to adopt judicial acts provided for by paragraph one of Article 51 of this Law.

Suspension of proceedings on an insolvency case shall not be an obstacle for the court to issue rulings provided for by this Law, as well as for the judicial manager and other persons participating in the insolvency case to perform the actions provided for by this Law.

If a criminal case is initiated against the head or founders (participants) or the owner of an enterprise or an individual entrepreneur and (or) a natural person for actions (inaction) that led to insolvency, the insolvency proceedings shall be suspended until the court adopts a decision on the initiated criminal case.

Article 59. Distribution of Court Expenses and Expenses for Payment of Remuneration to Judicial Manager

Court expenses, including the costs of the state fee, the payment term of which was deferred or by installments, the costs of publishing information in the media in the order prescribed by Articles 53 and 54 of this Law, as well as the expenses of paying remuneration to judicial managers, shall be paid at the expense of the debtor's property extraordinarily.

A settlement agreement may provide for a different procedure for the distribution of expenses specified in part one of this Article.

If the court decides to refuse to declare the debtor bankrupt due to the failure to establish signs of insolvency, the expenses provided for in part one of this article shall be borne by the creditors who applied to the court with an application to initiate proceedings on the debtor's insolvency, and distributed among them in proportion to their requirements.

The procedure for the distribution of court expenses and expenses for the payment of remuneration to judicial managers shall be established in a court decision or ruling adopted on the basis of the results of consideration of an insolvency case.

Article 60. Consideration of Applications and Complaints

Applications of the judicial manager, including on disagreements that have arisen between them and the creditors, between them and the debtor, as well as complaints of creditors about the violation of their rights and legitimate interests, filed in accordance with this Law in the course of monitoring procedures, judicial rehabilitation, external management or liquidation proceedings shall be considered by the court no later than within fifteen days from the date of receipt of the said applications and complaints. The application of the judicial manager, the complaint of the creditor must be accompanied by evidence of sending copies of them to other persons participating in the consideration of this application or complaint. Based on the results of consideration of these applications and complaints, the court shall issue a ruling. This ruling may be appealed in the manner and terms established by law.

The following shall be considered in the manner prescribed by part one of this Article,:

disagreements between the judicial manager and the representative of the debtor's employees on the amount and composition of claims with respect to labor payments and payment of severance pay to persons working under an employment contract;

complaints of creditors, representatives of the founders (participants) or the owner of the debtor's property against the actions (inaction) of the judicial manager, violating their rights and legitimate interests.

Applications and complaints filed by persons who do not have the right to appeal against a court ruling, as well as in violation of the procedure provided for in parts one and two of this article, or without attaching evidence confirming the relevant application or complaint, shall be subject to return.

Article 61. Proceedings for Revision of Court Rulings Issued as Result of Consideration of Disagreements in Insolvency Case

A court ruling issued on the basis of the results of consideration of applications, complaints (petitions) and disagreements in an insolvency case shall be subject to revision in the manner established by the Economic Procedure Code of the Republic of Uzbekistan, with the special considerations provided for in this Article.

A court ruling issued as a result of consideration of disagreements in an insolvency case shall enter into force ten days after its issuance.

The right to file an appeal shall be granted to persons who participated in the consideration of disagreements in an insolvency case.

An appeal against a court ruling referred to in part one of this article shall be filed within ten days from the date of the court ruling on the results of consideration of disagreements and shall be subject to consideration within ten days from the date of its receipt by the court.

A cassation appeal against a ruling of the court specified in part one of this Article, which has not been considered in appeal proceedings, shall be filed within one month from the date the ruling enters into legal force and must be considered within ten days from the moment of its receipt by the court.

Article 62. Special Considerations with Respect to Proceedings in Insolvency Cases of Debtor, which has State Share in Charter Fund (Authorized Capital)

If there is a state share in the charter fund (authorized capital) of the debtor, the court shall notify the authorized state body of initiation of insolvency proceedings.

The authorized state body, within two weeks from the date of receipt of the notice of initiation of insolvency proceedings, shall inform the court of its attitude on the advisability or inexpediency of pre-judicial rehabilitation.

If creditors agree to conduct pre-judicial rehabilitation, the insolvency proceedings shall be subject to termination.

In case of disagreement of creditors to conduct pre-judicial rehabilitation, the insolvency proceedings shall be carried out in accordance with the procedure established by this Law.

Chapter 6. Invalidity of Transactions

Article 63. Invalidity of Transactions Concluded By Debtor

Any transaction entered into by the debtor, including prior to the initiation of insolvency proceedings or the introduction of external management or judicial rehabilitation procedures, may be declared invalid by the court upon the application of the judicial manager on the grounds provided for by legislation.

Transactions shall be invalidated on the grounds specified in Articles 115 — 126 of the Civil Code of the Republic of Uzbekistan and provided for by this Law, if they were concluded by the debtor or their representative within three years before the initiation of an insolvency case, unless otherwise provided by this Law.

The following transactions concluded before the initiation of insolvency proceedings, in addition to the grounds provided for in part two of this Article, may be declared invalid:

low-value transactions entered into by the debtor, including transactions entered into by exchanging their goods for similar goods or donating them;

transaction, the price and (or) other conditions of which significantly worsen the position of the debtor in comparison with a transaction concluded in a similar way, and if this transaction has led to financial losses;

transaction on the transfer of property on a gratuitous or paid basis (including for temporary use) at a price different from the price for similar or the same property, and significantly worsening the condition of the debtor, even if the interests of creditors are not infringed;

transaction leading to preferential satisfaction of the claims of one creditor over others;

donation agreements of the debtor's property, with the exception of those concluded in permanent commercial transactions, if they differ significantly from agreements concluded a year before the initiation of insolvency proceedings.

A transaction entered into by a debtor which is a legal entity after the initiation of an insolvency case or within thirty-six months preceding the filing of an application for initiation of an insolvency case, related to the payment (allocation) of a share in the property to a participant in the debtor in connection with their withdrawal from the list of participants in the debtor, may be declared invalid by the court and the consequences of the invalidity of the transaction may be applied upon the judicial managerʼs or creditor's application, and all property (monetary funds) received under such a transaction shall be returned to the debtor. In this case, the participant shall be recognized as a creditor of the fourth turn in accordance with Article 150 of this Law.

Article 64. Invalidity of Transactions Causing Losses to Creditors

A transaction made by a debtor with an interested person or other economic entity may be recognized by the court as invalid upon the application of the judicial manager if, as a result of the execution of the said transaction, the debtor and (or) creditors have suffered or may suffer losses.

Article 65. Invalidity of Debtor's Transactions Related To Preferential Satisfaction of Claims of Some Creditors over Others

A transaction entered into by a debtor with respect to individual creditor or another person after the acceptance of an application for initiating insolvency proceedings against the debtor may be declared invalid by a court if such transaction entails the preferential satisfaction of claims for the monetary obligations of the debtor of some creditors over others, upon application of the judicial manager or creditor under one of the following conditions:

transaction is aimed at ensuring the fulfillment of the obligation of the debtor or a third party to an individual creditor before the execution of the transaction;

transaction has led or may lead to a change in the order of satisfaction of creditors' claims for obligations that arose prior to the transaction;

transaction has led or may lead to the satisfaction of the claims of some creditors, the due date for which by the time of the transaction has not come, in the presence of obligations to other creditors that have not been fulfilled within the prescribed period;

if an individual creditor has been granted or may be granted more advantages in relation to the satisfaction of claims, and this leads to a violation of the order of priority for settlements with creditors provided for by this Law.

Article 66. Invalidity of Transactions Related To Debtor's Legal Successors

If transactions are concluded by the debtor in favor of the heirs and other legal successors interested in the disputed transaction, then these transactions may be declared invalid.

Article 67. Consequences of Invalidity of Transaction

Where the transaction concluded by the debtor is declared invalid by the court and the consequences of the invalidity of this transaction are applied, the party shall be obliged to return to the other party everything received under the transaction, and if it is impossible to return what was received in kind (including when the received is expressed in the use of property, performed work or service provided) to reimburse its value in money, unless other consequences of the invalidity of the transaction are provided by law.

In this respect, the party that concluded the transaction with the debtor shall have the right to bring a claim against the debtor, the requirements of which must be satisfied in accordance with this Law.

If, in the cases provided for by this article, it is impossible to return the property in kind due to the loss, damage or unjustified acquisition of property by third parties, the original buyer of the property shall be liable to the debtor to compensate for the value of such property.

Where it is impossible to return the value of the property, the person who made the decision to alienate the debtor's property may be held subsidiary liable in the manner prescribed by this Law.

Article 68. Persons Entitled to File Application for Recognition of Transactions as Invalid

A claim for invalidation of a transaction entered into by a debtor may be filed with a court by a judicial manager on behalf of the debtor on their own initiative or by decision of a meeting of creditors or a committee of creditors, as well as by one or more creditors whose claims are included in the register of creditors.

The limitation period for a claim for invalidation of a transaction entered into by the debtor shall be calculated from the day when the judicial manager became aware or should have become aware of the existence of grounds for invalidating the transaction, provided for by this Law.

Chapter 7. Liability of Head of Debtor and Other Persons in Insolvency Case

Article 69. Person who is Managing Debtor's Affairs

Unless otherwise provided by this Law, the following circumstances shall be recognized as the management of the debtor's affairs:

existence of the right, within three years before the appearance of signs of insolvency, to give binding instructions or the ability to otherwise determine the actions of the debtor, including the execution of transactions and the determination of their conditions;

existence of the right, in the period from the moment the signs of insolvency appear and until the court accepts an application for the debtor's insolvency, to give binding instructions or otherwise determine the actions of the debtor, including the execution of transactions and the determination of their conditions.

The persons managing the affairs of the debtor shall be:

head and members of the executive body of the debtor, the liquidation commission or the liquidator of the debtor;

persons who have the right, independently or jointly with interested parties, to dispose of fifty or more percent of the shares of a joint-stock company;

persons who have the right to dispose of more than half of the shares of the charter fund (authorized capital) of a limited liability company or other business entities;

persons who have the right to appoint (elect) the head.

Article 70. Subsidiary Liability In Case of Incomplete Satisfaction of Creditors' Claims

If the insolvency of a legal entity is caused by unlawful actions of a person as a founder (participant) who shall have the right to issue mandatory instructions for this legal entity, or the owner of the property of the legal entity or the person managing the affairs of the debtor, then subsidiary liability may be imposed on such person for their obligations in case of insufficiency of the property of the legal entity.

Until proven otherwise, the following circumstances, determined in a judicial act, shall be considered to have led to the impossibility of full satisfaction of creditors' claims due to unlawful actions:

if significant damage has been caused to the property rights of creditors as a result of the conclusion in favor of the person managing the affairs of the debtor, or by this person of one or more transactions of the debtor (the conclusion of such transactions at the direction of this person), including the transactions provided for in Chapter 6 of this Law;

if there is a court decision that has entered into legal force on the identification by joint actions of the beneficiaries and affiliated persons of signs of false insolvency, concealment of insolvency or deliberate insolvency of the debtor;

debt arising in connection with the adoption of a judicial act on holding persons managing the debtor's affairs liable for violation of acts of legislation exceeds seventy percent of the total amount of claims included in the register of creditors' claims.

If the illegal actions of several persons managing the affairs of the debtor make it impossible to fully satisfy the claims of creditors, such persons shall bear subsidiary liability jointly and severally.

The court may release a person from subsidiary liability or reduce the amount of liability, unless it is proved that the person brought to subsidiary liability had a decisive influence on the debtor's activities.

The amount of subsidiary liability of the person managing the affairs of the debtor shall be equal to the difference between the sum of the claims included in the register of creditors' claims and the liquidation estate.

If it is proved that the amount of subsidiary liability of the person managing the affairs of the debtor is less than the amount of damage caused to the property rights of creditors through the fault of such a person, the amount of claims subject to satisfaction at the expense of this managing person may be correspondingly reduced.

If the insolvency of a legal entity has arisen due to unlawful actions of the founder (participant) or owner of the property of the legal entity, who has the right to give mandatory instructions to the legal entity, these persons shall not be entitled to participate as a head and (or) founder (participant) or owner of property in other legal entities until the debtor's obligations to creditors are repaid.

Article 71. Persons Entitled to File Application for Bringing To Subsidiary Liability

Persons participating in the insolvency case from the date of declaring the debtor bankrupt and commencement of liquidation proceedings, as well as the judicial manager, on their own initiative or in accordance with the decision of the meeting of creditors or the committee of creditors or at the direction of the authorized state body, shall have the right to apply to the court with an application for bringing to court subsidiary liability.

If there are grounds provided for in Article 70 of this Law, employees or former employees of the debtor shall have the right to apply to the court for bringing persons to subsidiary liability on the issue of uncovered debt due to insufficient property after the court has issued a ruling on the completion of the liquidation proceedings.

On the grounds provided for in Article 70 of this Law, a person entitled to file an application for bringing to subsidiary liability may apply to the court for bringing to subsidiary liability within three years from the day when they knew or should have known about the existence of relevant grounds for subsidiary liability, but no later than three years after issuance of a court ruling on the completion of the liquidation proceedings against the debtor.

Article 72. Rights of Person Subject To Subsidiary Liability

A person subject to subsidiary liability on the basis of an application filed with the court in the framework of an insolvency case shall be deemed a person participating in the insolvency case.

A person brought to subsidiary liability shall have the right of recourse (recourse) against the debtor in the framework of an insolvency case, which shall be satisfied after satisfaction of all other creditors' claims included in the register of creditors' claims.

Article 73. Consideration of Application for Bringing To Subsidiary Liability

An application for bringing to subsidiary liability shall be considered by the court in accordance with the procedure established by this Chapter.

The court may refuse to bring to subsidiary liability if it is established that there is insufficient information that the person indicated in the application is the manager of debtor's affairs.

In case of initiation of a case on the insolvency of a person subject to subsidiary liability, the issue of bringing this person to liability shall be considered within the framework of the insolvency case.

When considering an application for bringing to subsidiary liability on the grounds provided for in Article 70 of this Law, it is impossible to determine the amount of subsidiary liability, the court shall issue a ruling to suspend consideration of the application until all the evidence necessary for bringing to subsidiary liability has been established and settlements with the creditor have been completed. The said ruling may be appealed (protested).

If the court, when considering an application, issues a ruling on securing a claim, measures to secure the claim shall be also in effect during the period of suspension of consideration of this application.

If, after the completion of settlements with creditors, unpaid claims of creditors remain due to the insufficiency of the debtor's property, the liquidation manager shall apply to the court to reopen the case on bringing to subsidiary liability, with attaching a report on the results of the liquidation proceedings and a decision of the meeting of creditors on the amount of unreimbursed creditors' claims.

The issue of determining the amount of subsidiary liability and the liquidation manager's report on the results of the liquidation proceedings shall be considered by the court.

Article 74. Use of Right to Claim for Subsidiary Liability

The liquidation manager, within three days from the date of receipt of the judicial act that has entered into legal force on bringing the persons managing the affairs of the debtor to subsidiary liability, shall notify the creditors of the choice of the method of using the right of claim for bringing to subsidiary liability.

Within ten days from the date of receipt of such notification, the creditor shall have the right to send an application to the liquidator to choose one of the following ways of using the right to claim for bringing to subsidiary liability:

debt collection in the framework of an insolvency case;

sale of the right to claim;

waiver of the right to claim or part of it in favor of another creditor.

Within twenty days from the date of sending the notice provided for by paragraph one of this article, the liquidation manager shall send to the court a report on the results of choosing the method for using the creditors' right to claim for subsidiary liability.

The report must contain information about the choice of each creditor, the amount and order of claims.

If the creditor fails to submit an application within the period provided for by paragraph two of this article, it shall be deemed that the creditor has chosen the method provided for by paragraph two of paragraph two of this article.

By a judicial act on bringing to subsidiary liability, the court shall:

issue, in accordance with the amount of claims, a writ of execution indicating the order and amount of satisfaction of the claim provided for in article 150 of this Law to each creditor who has chosen the method provided for in paragraph three of part two of this article;

issue an executive document on insolvency in the name of the debtor as a recoverer of the remaining amount.

If the amount of claims of creditors who have chosen the method provided for in paragraph two of part two of this article exceeds the amount of claims of creditors who have chosen the method provided for in paragraphs three and four of part two of this article, the liquidation manager shall recover the debt on subsidiary liability within the framework of an insolvency case. Otherwise, the judicial manager shall convene a meeting of creditors to approve the methods of selling the right of claim and refusal in favor of another creditor.

If a writ of execution on securing the execution of a judicial act on bringing to subsidiary liability is issued in the name of the debtor as a recoverer in a case within the framework of insolvency, and its execution will lead to an excess of the period of liquidation proceedings provided for in Article 140 of this Law, the debt may be recovered by waiving the claim in favor of another person or transfer of debt to another person.

Article 75. Execution of Judicial Act on Bringing To Subsidiary Liability

Any creditor that has a judicial act on subsidiary liability shall have the right to demand the initiation of enforcement proceedings. In the course of this enforcement proceedings, the claims of claimants shall be subject to satisfaction in the order provided for by this Law.

The monetary funds received in the course of the execution of a judicial act on bringing to subsidiary liability shall be directed to satisfy the requirements of creditors. The liquidation manager, in order to implement the requirements of this rule, shall transfer these funds to a special deposit account of the court.

Article 76. Consideration of Application for Bringing To Subsidiary Liability outside the Framework of Insolvency Case

After the completion of the proceedings on the insolvency case, the persons whose claims are not fully satisfied, shall have the right to apply to the court for bringing to subsidiary liability outside the scope of the insolvency case, if there are grounds for bringing to subsidiary liability.

If an application for bringing to subsidiary liability is filed in accordance with part one of this article, the following actions shall be performed when considering the application:

if the application does not indicate the persons interested in bringing the persons managing the debtorʼs affairs to subsidiary liability, the court shall leave such an application without movement and grant the applicant the right to familiarize themselves with the insolvency case in order to identify interested persons;

application shall be considered in accordance with the provisions of economic and civil procedural legislation, regardless of the number of applicants;

in a judicial act on bringing a person to subsidiary liability, the amount collected in favor of each creditor and the order in which the claims are satisfied shall be indicated;

in the executive document issued on the basis of a judicial act on bringing the persons managing the affairs of the debtor to subsidiary liability, in addition to information on the amount payable to each creditor, the court shall indicate the order of satisfaction of the claim of each creditor.

Article 77. Special Considerations with Respect to Conclusion and Approval of Settlement Agreement When Considering Application for Bringing To Subsidiary Liability

When considering an application for bringing to subsidiary liability, a settlement agreement may be concluded.

If a person brought to subsidiary liability provides information about the property, the amount of which is sufficient for the execution of a settlement agreement, this settlement agreement may be approved by the court.

A settlement agreement may be concluded only between the person who filed an application for bringing to subsidiary liability and the person brought to subsidiary liability.

The terms of the settlement agreement (including the provision of compensation, the exchange of claims for shares, stock in the charter fund (authorized capital), bonds or other shares convertible into bonds, or other securities, innovative ideas, etc.) shall be drawn up on the basis of the unanimous approval of the persons who filed applications for subsidiarity.

In case of failure to comply with the terms of the settlement agreement within the prescribed period, the creditor shall have the right to apply for a writ of execution to collect the debt to the court that considered the application for bringing to subsidiary liability.

Chapter 8. Monitoring Procedure

Article 78. Introduction of Monitoring Procedure

When initiating an insolvency case, the monitoring procedure shall be introduced from the date the court accepts for proceedings an application for initiating an insolvency case against a debtor that is a legal entity, except for cases when, in accordance with this Law, a different insolvency procedure must be applied to the debtor. In the case of initiation of an insolvency case, the court ruling on accepting an application for proceedings shall indicate the introduction of a monitoring procedure.

Article 79. Consequences of Introduction of Monitoring Procedure

From the moment of introduction of the monitoring procedure:

execution of enforcement documents for property recovery shall be suspended, with the exception of the execution of enforcement documents issued on the basis of judicial acts on the recovery of wage arrears, the payment of remuneration under copyright agreements, alimony, as well as on compensation for harm caused to life or health, and compensation for moral damage, entered into force until the court accepts the application for initiation of insolvency proceedings. The basis for the suspension of the execution of enforcement documents shall be a court ruling on the acceptance of an application for processing and initiation of an insolvency case;

satisfaction of the claims of the founders (participants) of the debtor which is a legal entity for the allocation of a share (stock) in the property of the debtor in connection with the withdrawal from its founders (participants) shall be prohibited;

payment of dividends and other payments on issuance securities shall be prohibited.

Claims for the receipt of monetary funds from the debtor may be presented only in compliance with the procedure for presenting claims against the debtor, established by Article 87 of this Law.

From the date of the introduction by the court of the monitoring procedure in relation to the debtor, a unilateral refusal to perform or unilateral modification of contracts by the debtor's counterparty shall not allowed, even if this is allowed by agreement of the parties.

In case of disagreement on the circumstances provided for by part three of this article, the debtor's counterparty's claim to amend or terminate the contract shall be considered by the court within the framework of an insolvency case.

The court shall have the right to refuse to amend or terminate the contract if the debtor provides evidence that they will be able to perform the contract in the course of insolvency proceedings (security of obligations by another creditor or a third party provided for by civil law can be accepted as such evidence) and elimination of the delay fulfillment of obligations under the contract.

The court shall have the right to postpone the meeting of creditors until consideration of the request for amendment or termination of the contract, if the consideration of such an issue is important for the approval of the judicial rehabilitation plan and the debt repayment schedule or the external management plan.

Article 80. Mutual Settlement of Claims

Termination of the debtor's financial obligations by mutual settlement of an alternative counterclaim, except for the case provided for by part eight of this article, shall be allowed only in cases where:

debtor's and the creditor's claims for monetary obligations arose before the initiation of insolvency proceedings;

monetary obligations of the debtor and the creditor arose as a result of transactions made before the commencement of the insolvency proceedings, and the period for claiming these obligations began after the commencement of the insolvency proceedings, or the date and time of the claim is not specified.

The provisions of Articles 150 and 185 of this Law shall not be taken into account when considering mutual claims. Obligations shall be considered terminated when one of the parties has declared this, starting from the entry into force of the counterclaims of the parties on the date of their compliance, that is, from the moment of expiration of the period for fulfilling the obligation, regardless of whether an application for payment has been received or accepted.

Termination of the debtor's financial obligations by mutual settlement of an alternative counterclaim shall not be allowed in cases where:

claims of the debtor (or against the debtor) for monetary obligations arose after the initiation of an insolvency case, if this would lead to a violation of the rights of creditors;

claims of the debtor (or against the debtor) for monetary obligations were acquired in bad faith before the initiation of insolvency proceedings. If the acquirer of the right to claim knew or should have known that the debtor had signs of insolvency, but acquired this right, it shall be assumed that it was acquired in bad faith. Otherwise, the proof of the fact rests with the acquirer of the right to claim.

If claims become counterclaims as a result of a change in the person in the obligation, then the time of their occurrence cannot be earlier than the date of such change.

An application for an alternative counterclaim by mutual settlement may be filed by the creditor, debtor or liquidation manager.

Disputes on the termination of monetary obligations by mutual settlement of the debtor's alternative counter claim shall be considered by the court in the manner prescribed by Article 60 of this Law.

If the terms of mutual settlements have come within six months before the initiation of insolvency proceedings, mutual settlements can be challenged only in case of bad faith of the actions of the creditor.

If the acquisition of the debtor's claims made at a price significantly lower than the cost, as well as the assumption of the obligations of a person (including by transferring a debt) without reasonable monetary compensation later became the reason for initiating an insolvency case against the debtor, this may be evidence of the bad faith of the creditor.

Article 81. Restriction of Debtor's Rights during Monitoring Procedure

The introduction of a monitoring procedure shall not be grounds for dismissal of the head of the debtor and other management bodies of the debtor which shall continue to exercise their powers with the restrictions established by parts two and three of this article.

The debtor's management bodies may only with the written consent of the temporary manager conduct:

transactions related to the transfer of immovable property for rent, pledge or disposal of such property in any other way;

major transactions;

transactions related to the receipt and issuance of loans (credits), the issuance of sureties and guarantees, the assignment of claims, the transfer of debt, as well as the conclusion of an agreement on fiduciary management of the debtor's property.

The debtor's management bodies shall not be entitled to adopt decisions:

on reorganization (merger, accession, division, separation, transformation) and liquidation of the debtor;

on the creation of legal entities or on participation in other legal entities;

on the opening of representative offices and the creation of branches;

on payment of dividends or distribution of income (profit) of the debtor between its founders (participants);

on the placement by the debtor of bonds and other issuance papers, with the exception of the decision to issue shares;

on the acquisition of previously issued shares from shareholders.

Article 82. Appointment of Temporary Manager

A temporary manager shall be appointed by the court from among the candidates proposed by creditors or an authorized state body or a public association of judicial managers.

The court ruling on the appointment of a temporary manager must indicate the amount and procedure for paying their remuneration.

The amount of remuneration of a temporary manager may be changed by the court on the basis of a decision of the meeting of creditors.

A temporary manager shall have the right to apply to the court with an application for their release from the performance of duties.

In case of satisfaction of the petition of the temporary manager to release them from the performance of their duties, the court shall appoint a new temporary manager from among the candidates proposed by the creditors. In the event that a candidate for a temporary manager is not presented, the court shall appoint a temporary manager from among the candidates proposed by the authorized state body or a public association of judicial managers. Until a new temporary manager is appointed, the temporary manager shall continue to perform duties.

Article 83. Rights of Temporary Manager

The temporary manager shall have the right to:

submit claims to the court on its own behalf for the recognition of transactions as invalid, as well as for the application of the consequences of the invalidity of void transactions concluded or executed by the debtor in violation of the requirements established by legislation;

raise objections to the fulfillment of creditors' claims during the monitoring procedure in the cases provided for in Article 79 of this Law;

take part in the verification by the judge of the validity of the submitted objections of the debtor to the claims of creditors;

file a petition with the court for taking additional measures to ensure the safety of the debtor's property, including a ban on making transactions not provided for in Article 81 of this Law without the consent of the temporary manager, on transferring property for storage to third parties, as well as on the abolition of such measures;

apply to the court with a petition to remove the head of the debtor from the performance of duties;

receive any information and documents relating to the activities of the debtor.

The temporary manager may also have other rights in accordance with the legislation.

The management bodies of the debtor shall be obliged to provide the temporary manager at their request with any information relating to the activities of the debtor.

Article 84. Obligations of Temporary Manager

The temporary manager shall oblige to:

take measures to ensure the safety of the debtor's property;

analyze the financial condition of the debtor;

identify the debtor's creditors and maintain a register of creditors' claims, notify creditors of the introduction of a monitoring procedure with respect to the debtor;

provide within ten days information on the financial condition of the debtor and (or) its activities at the request of the creditor;

convene and hold the first meeting of creditors.

The temporary manager may also bear other duties in accordance with the legislation.

After the end of the monitoring procedure, but not later than five days before the date of the court session, the temporary manager shall be obliged to submit to the court a report on their activities, information on the financial condition of the debtor and proposals on the possibility or impossibility of restoring the debtor's solvency, the protocol of the first meeting of creditors with documents attached provided for in Article 16 of this Law.

Article 85. Notification on Introduction of Monitoring Procedure

The temporary manager shall be obliged, within three days from the moment of appointment, to send for publication in the mass media a message on the introduction of a monitoring procedure in relation to the debtor in the manner prescribed by Article 53 of this Law.

The temporary manager shall be obliged, no later than ten days from the date of publication of the notice on the introduction of the monitoring procedure, to notify all identified creditors of the debtor, with the exception of creditors for the payment of wage arrears, of the court ruling on the introduction of monitoring in respect of the debtor.

The head of the debtor shall be obliged to notify the debtor's employees, founders (participants) or the owner of the debtor's property no later than three working days from the date of receipt of the court ruling on the introduction of a monitoring procedure in relation to the debtor.

Notification of creditors about the introduction of the monitoring procedure, with the exception of creditors for the payment of wage arrears, shall be carried out by sending a message to the creditor in a way that makes it possible to establish the date of receipt by the creditor of such a message.

Notification of creditors of claims for payment of wage arrears shall be carried out by convening and holding a general meeting of the debtor's employees.

Notification of the founders (participants) of the debtor shall be carried out by convening a general meeting of founders (participants) or sending a message to the body of a legal entity that shall have the right to convene a general meeting of founders (participants) in accordance with the legislation or constituent documents about the introduction of a monitoring procedure in relation to the debtor.

A notice on the introduction of a monitoring procedure with respect to the debtor must contain:

name (surname, name, patronymic) of the debtor, its location (postal address), e-mail address (upon availability);

name of the court which issued the ruling on the introduction of a monitoring procedure with respect to the debtor, the date of issuance of such a ruling and the number of the insolvency case;

surname, name, patronymic of the appointed temporary manager and their postal address;

date, time and place of the court session set by the court to consider the insolvency case;

other information at the discretion of the sender of the message (temporary manager or head of the debtor).

Article 86. Analysis of Financial Condition of Debtor

An analysis of the financial condition of the debtor shall be carried out in order to determine the sufficiency of the debtor's property to cover court costs, the costs of paying remuneration to judicial managers, as well as the possibility or impossibility of restoring the debtor's solvency.

The temporary manager shall prepare proposals on the possibility or impossibility of restoring the debtor's solvency, substantiating information on the advisability of introducing subsequent insolvency procedures, based on the analysis of the financial condition of the debtor, including the results of the inventory of the debtor's property, if available, and the analysis of documents certifying the state registration of property rights.

Based on the results of the financial analysis, the temporary manager shall draw up one of the following conclusions on the financial condition of the debtor:

on failure to establish signs of insolvency;

on the existence of grounds for the introduction of one of the procedures for restoring solvency, if signs of temporary insolvency are revealed;

on the presence or absence of the possibility of restoring solvency, if signs of permanent insolvency are revealed.

The procedure for determining the financial condition of the debtor shall be established by the Cabinet of Ministers of the Republic of Uzbekistan.

A temporary manager may involve a specialized organization to determine the financial condition of the debtor.

Article 87. Establishing Amount of Creditors' Claims

In order to participate in the first meeting of creditors, creditors shall have the right to present their claims against the debtor within thirty days from the date of publication of information in the mass media about the introduction of a monitoring procedure in relation to the debtor. The creditors' claims shall be sent by the creditors to the court, the debtor and the temporary manager with the attachment of a judicial act or other documents confirming the validity of these claims.

The debtor shall have the right to file their objections to the court in relation to the creditors' claims, which have grounds for recognizing them as established, if:

there is a judicial act that has entered into legal force, repealing or amending the judicial act presented by the creditor as a basis for recognizing the claims as established, as well as suspending its operation or changing the method and procedure for its execution;

there is a document that cancels or changes the document (recognition of a debt, executive inscription of a notary, etc.) presented by the creditor as a basis for recognizing the claim as established, as well as suspending its operation;

an agreement has been concluded between the debtor and the creditor on changing the terms, procedure and conditions for repaying the debt on the basis of the document submitted by the creditor as evidence of classifying the claim as established;

debtor has made full or partial repayment of the debt;

there is evidence of a change in the person in the obligation under which the claim is made.

The temporary manager shall have the right to send to the court objections to the claims of creditors recognized in accordance with this Law, if the temporary manager has sufficient grounds to believe that the actions of the debtor to recognize the debt violate the rights and legitimate interests of other creditors and (or) are unfounded.

The objections of the debtor, the temporary manager on the claims of creditors may be submitted to the court within a week from the date of receipt of the relevant claims. Claims of creditors against which objections have been received shall be considered at a court session. Based on the results of the consideration, a court ruling shall be issued to include or to refuse to include the said claims in the register of creditors' claims. The creditor's claim, against which the debtor or the temporary administrator has not filed objections within the specified period, shall be entered in the register of creditors' claims in the amount declared by the creditor.

If creditors' claims are recognized as unfounded or not supported by proper evidence, the relevant creditors' claims shall be returned. These claims may be presented in the course of subsequent insolvency proceedings.

The creditor may appeal against the decision of the temporary manager or the court on the refusal to include their claims in the register of creditors' claims.

Article 88. Convening First Meeting of Creditors

The temporary manager determines the date of the first meeting of creditors and notifies all identified creditors, the representative of the debtor's employees, as well as other persons (bodies) entitled to participate in the first meeting of creditors. Notification of the holding of the first meeting of creditors shall be carried out by the temporary manager in the manner prescribed by Article 14 of this Law. The first meeting of creditors must be held no later than five days before the date of the court session specified in the court ruling on accepting for proceedings an application for initiating insolvency proceedings against the debtor.

Participants in the first meeting of creditors with the right to vote are creditors whose claims have been filed in accordance with the procedure provided for by paragraph one of Article 87 of this Law and have been entered in the register of creditors' claims.

In the first meeting of creditors, a representative of the founders (participants) or the owner of the debtor's property, a representative of the debtor's employees may participate without the right to vote. The absence of these persons is not grounds for declaring the meeting of creditors invalid.

Article 89. Issues to be Considered by First Meeting of Creditors

At the first meeting of creditors, decisions shall be adopted on the following issues:

on applying to the court with a petition for the introduction of a judicial rehabilitation procedure or external management;

on applying to the court with a petition for declaring the debtor bankrupt and initiating liquidation proceedings;

on the number of members of the creditors' committee and their election;

on the approval of the candidature of the rehabilitation manager, external manager or liquidation manager;

on other issues provided for by this Law.

Article 90. Decision of the First Meeting of Creditors to Apply To Court For Introduction of Judicial Rehabilitation Procedure

The decision of the first meeting of creditors to apply to the court for the introduction of a judicial rehabilitation procedure must contain the proposed term for the judicial rehabilitation procedure and the approved debt repayment schedule.

The first meeting of creditors that has adopted a decision to apply to the court with a petition for the introduction of a judicial rehabilitation procedure shall have the right to apply to the court with a petition for the release of the temporary manager from the performance of duties. In the said petition of the meeting of creditors, the court may be offered a candidature of the rehabilitation manager for appointment.

Article 91. Decision of the First Meeting of Creditors to Apply To Court to Introduce External Management Procedure, to Declare Debtor Bankrupt and Start Liquidation Proceedings

The decision of the first meeting of creditors on applying to the court for the introduction of an external management procedure must contain the proposed term for the external management procedure and the candidate for the external manager, as well as information about them.

The decision of the first meeting of creditors on applying to the court for declaring the debtor bankrupt and initiating liquidation proceedings must contain the proposed term for liquidation proceedings and the candidate for the liquidation manager, as well as information about them.

Article 92. Termination of Monitoring Procedure

The court, on the basis of the decision of the first meeting of creditors, unless otherwise provided by this article, shall adopt decision on declaring the debtor bankrupt and initiating liquidation proceedings, or issue a ruling on the introduction of a judicial rehabilitation or external management procedure, or approve an settlement agreement and terminate the insolvency proceedings.

If the first meeting of creditors fails to decide on the application of one of the insolvency procedures, or if none of its decisions is submitted to the court within the period established by Article 16 of this Law, the court, if there are signs of insolvency, shall decide on declaring the debtor bankrupt and initiating liquidation proceedings, unless otherwise provided for in this article. If there are no signs of permanent insolvency, the court shall return the submitted materials for consideration at the meeting of creditors of the issue of introducing one of the restoration procedures in relation to the debtor.

If the first meeting of creditors decides to apply to the court with a petition to declare the debtor bankrupt and initiate liquidation proceedings, or if none of its decisions is submitted to the court, the court shall have the right to issue a ruling on the introduction of a judicial rehabilitation procedure at the request of the founders (participants) or the owner of the debtor's property, an authorized state body, as well as a third party (persons), provided that the applicants ensure security for the fulfillment of the debtor's obligations in accordance with the debt repayment schedule.

Prior to the appointment of a rehabilitating or external or liquidation manager, the fulfillment of their duties in full shall be assigned to the person who previously performed the duties of a temporary manager.

From the moment the court declares the debtor bankrupt and the commencement of liquidation proceedings, or the introduction of a judicial rehabilitation or external management procedure, or the approval of a settlement agreement, the monitoring procedure shall be terminated.

Chapter 9. Judicial Rehabilitation Procedure

Article 93. Petition for Introduction of Judicial Rehabilitation Procedure

During the monitoring procedure, the debtor, the founders (participants) or the owner of the debtor's property, as well as a third person (persons) shall have the right to apply to the first meeting of creditors with a petition to apply to the court for the introduction of a judicial rehabilitation procedure or directly to the court with a petition for the introduction of a judicial rehabilitation procedure .

The debtor's application for the introduction of a judicial rehabilitation procedure must be accompanied by a debtor's judicial rehabilitation plan indicating the proposed term for the judicial rehabilitation procedure and the debt repayment schedule.

Persons who have applied to the meeting of creditors with a petition to apply to the court for the introduction of a judicial rehabilitation procedure shall be obliged to submit the said petition and the documents attached to it to the temporary manager no later than two weeks before the date of the meeting of creditors in order to provide creditors with the opportunity to familiarize themselves with the specified documents.

The petition of the founders (participants) or the owner of the debtor's property on the introduction of a judicial rehabilitation procedure must be accompanied by a plan of judicial rehabilitation, a debt repayment schedule, and a protocol of the general meeting of founders (participants) of the debtor. The protocol of the general meeting must contain a list of founders (participants) who voted for the introduction of the judicial rehabilitation procedure, as well as documents on that these persons ensure that the debtor fulfills the debt repayment schedule.

The petition of the third person (persons) for the introduction of a judicial rehabilitation procedure must be accompanied by a debt repayment schedule and evidence that the third person (persons) ensures that the debtor fulfills the debt repayment schedule.

When applying to the meeting of creditors with a petition to apply to the court for the introduction of a judicial rehabilitation procedure by the persons specified in part one of this article, the enforcement of fulfilling the debt repayment schedule by the debtor shall be determined by an agreement between debtor and each of them.

Article 94. Ensuring Fulfillment By Debtor of Obligations In Accordance With Debt Repayment Schedule

The debtor's fulfillment of obligations in accordance with the debt repayment schedule may be ensured in the manner prescribed by legislation.

The debtor's obligations to fulfill the debt repayment schedule shall be considered secured from the moment the court issues a ruling on the introduction of a judicial rehabilitation procedure.

An agreement on the provision of security for the fulfillment of obligations shall be concluded in writing, unless otherwise provided by law. On the part of the creditors, this agreement shall be signed by a representative of the meeting of creditors or the committee of creditors, and in the case of the introduction of a judicial rehabilitation procedure at the initiative of the court, by the rehabilitation manager, and on the other hand, by the persons who provided security for the debtorʼs fulfillment of obligations in accordance with the debt repayment schedule (hereinafter referred to as the persons who provided securities for the fulfillment of obligations).

The amount of the provided security for the fulfillment of obligations must exceed by not less than twenty percent the amount of the debtor's obligations reflected in the balance sheet as of the last reporting date and in the debt repayment schedule drawn up on the basis of claims entered in the register of creditors' claims before the meeting of creditors on the introduction of a judicial rehabilitation procedure.

Property, including property rights belonging to the debtor on the right of ownership or on other property rights, cannot serve as the subject of securing the execution by the debtor of the debt repayment schedule.

Amendments to the debt repayment schedule, as well as the introduction of a new insolvency procedure in relation to the debtor, shall not be grounds for terminating the provided security for the fulfillment of obligations.

Article 95. Procedure for Introducing Judicial Rehabilitation Procedure

The judicial rehabilitation procedure shall be introduced by the court on the basis of the decision of the meeting of creditors, except for the cases provided for by paragraph three of Article 92 of this Law.

The court ruling on the introduction of the judicial rehabilitation procedure must indicate the term of the judicial rehabilitation procedure, contain the debt repayment schedule approved by the court, information about the persons who provided security for the fulfillment of obligations, the amount and forms of such security, the appointment of the rehabilitation manager and the amount of their remuneration.

A court ruling on the introduction of judicial rehabilitation may be appealed (protested against). An appeal (protest) against this ruling shall not suspend its execution.

The procedure of judicial rehabilitation shall be introduced for a period not exceeding twenty-four months.

Article 96. Consequences of Introduction of Judicial Rehabilitation Procedure

When carrying out the judicial rehabilitation procedure, the debtor's management bodies shall exercise their powers with the restrictions established by this Chapter.

At the time of the introduction of the judicial rehabilitation procedure:

previously taken measures to secure the claims of creditors shall be cancelled;

seizure of the debtor's property and other restrictions on the debtor's powers to dispose of the property belonging to it shall be imposed exclusively within the framework of the insolvency procedure;

payment of all types of current tax payments arising in the course of insolvency (with the exception of taxes on wages and payments equivalent to it) shall be suspended and paid after the expiration of the judicial rehabilitation procedure. In this case, the said tax debts shall be payable in equal installments within six months from the date of approval by the court of the report of the rehabilitation manager and the ruling to terminate the insolvency proceedings against the debtor;

forfeit (fine, penalty) and other economic (financial) sanctions for non-fulfillment or improper fulfillment of monetary obligations and for taxes and fees that arose at the time of the judicial rehabilitation procedure, as well as payable interest shall not be accrued.

Interest shall be accrued on the amount of the creditor's claims for monetary obligations and (or) taxes and fees subject to satisfaction in accordance with the debt repayment schedule in the manner and amount provided for in Article 327 of the Civil Code of the Republic of Uzbekistan. These interest shall be subject to accrual on the amount of the creditor's claims from the moment a court ruling on the introduction of judicial rehabilitation is issued and until the creditor's claim is paid off, and if such repayment has not occurred, until the decision is adopted to declare the debtor bankrupt and start liquidation proceedings.

At the petition of the meeting of creditors, persons who provided security for the fulfillment of obligations, or the rehabilitation manager, which contain information about the failure or improper performance by the head of the debtor of the plan of judicial rehabilitation or about the commission of actions (inaction) that violate the rights and legitimate interests of the debtor, creditors, persons who provided security fulfillment of obligations, the court shall have the right to remove the head of the debtor from the performance of duties. In these cases, the court shall have the right to assign the performance of the duties of the head of the debtor to the rehabilitation manager. The court shall issue a ruling on the removal of the head of the debtor from the performance of duties, which may be appealed (protested).

The founders (participants) or the owner of the debtor's property shall not be entitled, without the consent of the meeting of creditors or the committee of creditors, to adopt decisions on the reorganization (merger, accession, division, separation, transformation) and liquidation of the debtor, and the debtor shall not be entitled to make transactions:

transactions related to the lease or pledge of real estate, the contribution of the said property as a share in the charter fund (charter capital) of business entities, or the disposal of such property in any other manner;

major transactions;

related to the receipt and issuance of loans (credits), the issuance of sureties and guarantees, the assignment of claims, the transfer of debt, as well as the conclusion of an agreement on fiduciary management of the debtor's property;

in the commission of which there is an interest of the rehabilitation manager or creditors in the manner prescribed by legislation.

A court ruling on the introduction of a judicial rehabilitation procedure cannot be a basis for suspending or refusing to execute the debtor's contracts concluded before the initiation of an insolvency case. The execution of agreements concluded prior to the initiation of the debtor's insolvency proceedings, which are considered important for the continuation of the debtor's activities, shall be continued by the debtor or the rehabilitating manager, except for the cases provided for by this Law.

In this case, the agreement of the parties on the termination or refusal to execute the contracts concluded by the debtor in connection with the introduction of the judicial rehabilitation procedure in respect of the debtor shall be considered invalid, except as provided by this Law.

The rehabilitation manager and creditors shall have the right to demand that the debtor's transactions be declared invalid in the manner prescribed by legislation.

The rehabilitation manager and creditors shall have the right to demand the termination of agreements concluded after the initiation of insolvency proceedings or within twenty-four months preceding the filing of an application for initiation of insolvency proceedings against the debtor, or an agreement that has not been fully or partially performed, if one of the following circumstances exists:

execution of contracts will cause losses for the debtor and (or) violate the rights and legitimate interests of the debtor, creditors, persons who provided security for the fulfillment of obligations, in comparison with similar contracts concluded under comparable circumstances;

contract is concluded for a period of more than one year or is designed to obtain positive results for the debtor only in the long term;

contract results in preferential satisfaction of the claims of one creditor in comparison with the claims of other creditors.

The requirement to terminate contracts that have not been fully or partially performed may also be filed in the presence of other circumstances that prevent the restoration of the debtor's solvency.

Article 97. Rehabilitation Manager

The candidature of the rehabilitation manager shall be submitted to the court by the meeting of creditors or by the persons who have provided security for the fulfillment of obligations.

The rehabilitation manager shall act from the moment the judicial rehabilitation procedure is introduced and until the end of the judicial rehabilitation procedure or its early termination.

The rehabilitation manager may be released by the court at his own request or at the request of a meeting of creditors or persons who provided security for the fulfillment of obligations, as well as in other cases provided for by this Law.

The ruling of the court on the release of the Rehabilitation manager from the performance of duties with the simultaneous appointment of a new Rehabilitation manager may be appealed (protested against). An appeal (protest) against the said ruling shall not suspend its execution.

Termination of insolvency proceedings in connection with the restoration of the debtor's solvency during the judicial rehabilitation procedure shall entail the termination of the rights and obligations of the rehabilitation manager.

If a court has issued a ruling on the introduction of an external management procedure or a decision has been adopted on declaring the debtor bankrupt and initiating liquidation proceedings, and another person has been appointed as an external manager or liquidation manager, the rehabilitation manager shall continue to perform duties until the affairs are transferred to an external manager or liquidation manager.

Article 98. Rights of Rehabilitation Manager

The Rehabilitation manager shall have the right to:

demand from the head of the debtor information about the current activities of the debtor, the progress of the implementation of the measures provided for by the plan of judicial rehabilitation, and the implementation of the debt repayment schedule;

demand from the head of the debtor timely and complete transfer of funds to pay off the claims of creditors;

take part in the inventory of property if it is carried out by the debtor;

exercise control over the timely execution by the debtor of the current claims of creditors;

coordinate transactions and decisions of the debtor in the cases provided for by paragraph five of Article 96 of this Law, and provide information to creditors on these transactions and decisions;

file an application with the court to invalidate the debtor's transactions in the manner prescribed by Articles 63 , 64 and 65 of this Law;

appeal to the court the actions of the debtor to recognize the claims or confirm the grounds for recognizing the claims as established, or the debtor's inaction in terms of considering the claims of creditors in the cases and in the manner established by Articles 60 and 87 of this Law;

apply to the court with a petition to remove the head of the debtor from the performance of duties in the cases established by paragraph four of Article 96 of this Law;

request from the head, founders (participants) of the debtor and (or) state bodies information and documents related to the debtor;

to use public services, including services provided through public service centers, without making advance payments to ensure the exercise of their powers;

file a petition with the court for taking additional measures to ensure the safety of the debtor's property, including the transfer of property for storage to third parties, as well as for the cancellation of such measures.

The Rehabilitation manager may also have other rights in accordance with the legislation.

Article 99. Obligations of Rehabilitation Manager

The Rehabilitation manager shall be obliged to:

maintain a register of creditors' claims;

convene meetings of creditors in the cases provided for in Article 12 of this Law;

consider reports on the progress of the implementation of the plan of judicial rehabilitation and the debt repayment schedule provided by the debtor, and submit appropriate conclusions to the meeting of creditors;

provide within ten days information on the financial condition of the debtor and (or) its activities at the request of the creditor;

provide information on the course of implementation of the plan of judicial rehabilitation to the meeting of creditors and the committee of creditors, as well as to the authorized state body, if there is a state share in the authorized capital of the debtor.

The Rehabilitation manager may also have other obligations in accordance with the law.

Article 100. Judicial Rehabilitation Plan and Debt Repayment Schedule

The plan of judicial rehabilitation shall be prepared by the head of the debtor, the founders (participants) of the debtor or the owner of the debtor's property.

The recovery plan must specify specific measures to restore the debtor's solvency.

The recovery plan should include:

measures to restore the solvency of the debtor, the conditions and procedure for the implementation of these measures, the costs of their implementation and other expenses of the debtor;

debt repayment schedule;

amount and term of the guaranteed compensation that can be received in the event of liquidation of the debtor by the creditor who voted against the approval of the judicial rehabilitation plan, or the creditor who does not have the right to vote for the approval of this plan;

recovery period of the debtor's solvency.

The plan of judicial rehabilitation may contain measures to restore the solvency of the debtor, provided for in Article 125 of this Law.

The term for the implementation of the judicial rehabilitation plan may not exceed the term provided for in the court ruling on the introduction of the judicial rehabilitation procedure.

The judicial rehabilitation plan should provide for ways in which the debtor will receive during the rehabilitation process the funds necessary to satisfy the claims of creditors in accordance with the debt repayment schedule. The plan of judicial rehabilitation must be approved by the meeting of creditors.

When considering the issue of approving the plan of judicial rehabilitation, creditors of the first and second groups shall participate in the voting.

The decision of the meeting of creditors to approve the plan of judicial rehabilitation shall be considered adopted if the majority of creditors in each of the first and second groups voted for it. In this respect, the voting creditor who voted against the approval of the rehabilitation plan and the non-voting creditor shall be entitled to a guaranteed compensation at least equal to what they would have received in the event of the liquidation of the debtor.

If the creditors of each of the first and second groups do not adopt a decision to approve the plan of judicial rehabilitation, and also the required number of votes of the creditors of one of the groups is not presented during the voting, a decision shall be adopted to apply to the court with a petition to declare the debtor bankrupt and start liquidation proceedings.

The plan of judicial rehabilitation may provide for a reduction in the charter fund (authorized capital) of the debtor, the issuance and placement of an additional issue of the debtor's shares, the contribution of an additional share to the charter fund (authorized capital) and the conversion of creditors' claims into shares in accordance with Article 130 of this Law.

The plan of judicial rehabilitation may provide for the sale of an enterprise (business) or part of the debtor's property in the manner prescribed by Articles 126 and 127 of this Law.

Creditors who voted against the approval of the judicial rehabilitation plan may, in order to protect their rights, engage experts to verify:

right to receive a guaranteed compensation at least equal to what they would receive in the event of liquidation of the debtor of the creditor with the right to vote and voted against the approval of the rehabilitation plan, and the creditor without the right to vote;

possibility to successfully implement the rehabilitation plan;

priority right of creditors secured by the debtor's property over other creditors.

If the debtor provided false or misleading information about the property for the judicial rehabilitation plan or concealed information related to their activities and (or) work, the meeting of creditors may decide to cancel the judicial rehabilitation plan and early termination of the judicial rehabilitation procedure and submit to the court petitions for the introduction of an external management procedure or for declaring the debtor bankrupt and initiating liquidation proceedings.

The court, on the basis of the petition of the meeting of creditors, shall issue a ruling on early termination of the judicial rehabilitation procedure and, accordingly, on the introduction of an external management procedure, or adopt decisions on declaring the debtor bankrupt and initiating liquidation proceedings.

The debtor's managing body and the rehabilitation manager shall be responsible for the implementation of the approved judicial rehabilitation plan.

The meeting of creditors and (or) the committee of creditors shall exercise control over the implementation of the plan of judicial rehabilitation.

The creditor shall have the right to request from the rehabilitation manager any information related to the implementation of the judicial rehabilitation plan.

The plan of judicial rehabilitation may provide for the full or partial release of the debtor from debts or their change.

Full or partial release of the debtor from debts or their change shall be made with the consent of all creditors.

If any creditor opposes the full or partial release of the debtor from debts or their change, the other creditors shall have the right to offer them to redeem the claims in accordance with the register of creditors' claims.

A creditor who opposes the full or partial release of the debtor from debts or their change shall be obliged to accept the condition proposed by the other creditors.

The debt repayment schedule must provide for the repayment of debts to all creditors, unless otherwise provided by this Law. The debt repayment schedule shall be subject to court approval.

Satisfaction of creditors' claims for the debtor's current payments arising in the course of the judicial rehabilitation procedure shall be carried out in the manner prescribed by Articles 149 , 150 and 185 of this Law.

The debtor shall have the right to fulfill the debt repayment schedule ahead of schedule.

Article 101. Amendments to Judicial Rehabilitation Plan and Debt Repayment Schedule

In the event that the debtor fails to fulfill the plan of judicial rehabilitation and (or) the debt repayment schedule (failure to repay the debt on time and (or) in the established volumes), the debtor, within two weeks from the date of fulfillment of the requirements, shall have the right to apply to creditors with a petition for approval of amendments to the debt repayment schedule. A copy of the petition shall be forwarded to the Rehabilitation manager. On the basis of this petition, the rehabilitation manager shall convene a meeting of creditors no later than two weeks after the receipt of the petition.

If creditors determine that it is not possible to fully or partially comply with the rehabilitation plan and debt repayment schedule, or consider that it is possible to implement them only by making amendments, the court may amend the rehabilitation plan and debt repayment schedule.

The decision of the meeting of creditors to amend the plan of judicial rehabilitation and (or) the debt repayment schedule shall be adopted in the manner prescribed by Article 100 of this Law.

If a decision is adopted to amend the debt repayment schedule, the meeting of creditors shall adopt decision to file a petition with the court for approval of amendments to the debt repayment schedule.

Claims of a creditor who was not notified in a timely manner of the initiation of insolvency proceedings and entered into proceedings on the case after the court approved the debt repayment schedule, or for which the deadline for fulfilling the obligation came during the monitoring procedure, shall be included in the debt repayment schedule by ruling of the court.

The court shall have the right to issue a ruling on amending the debt repayment schedule only in respect of claims included in the register of creditors' claims.

Article 102. Early Completion of Judicial Rehabilitation Procedure

In the event that the debtor repays all the claims of creditors provided for by the debt repayment schedule, before the expiration of the term of the judicial rehabilitation procedure established by the court, the head of the debtor shall submit to the court a report on the early completion of the judicial rehabilitation procedure in the manner prescribed by Article 104 of this Law. The report of the head of the debtor on the early completion of the procedure of judicial rehabilitation, the conclusion of the Rehabilitation manager on the report of the head of the debtor and the complaints of creditors shall be considered by the court at a meeting.

The rehabilitating manager shall be obliged to notify all creditors whose claims were included in the debt repayment schedule of the date, time and place of the court session to consider the report of the head of the debtor on the early completion of the judicial rehabilitation procedure.

Based on the results of consideration of the report of the head of the debtor on the early completion of the judicial rehabilitation procedure, as well as the complaints of creditors, the court shall:

approve the report of the head of the debtor and terminates the insolvency proceedings, if the outstanding debt is not revealed, and the creditors' complaints are recognized as unfounded;

refuse to approve the report of the head of the debtor, if the presence of outstanding debt is revealed and the creditors' complaints are recognized as substantiated.

A court ruling shall be issued on the approval of the report of the head of the debtor and the termination of the insolvency proceedings or refusal to approve the said report, which may be appealed (protested).

Article 103. Early Termination of Judicial Rehabilitation Procedure

The grounds for early termination of the judicial rehabilitation procedure shall be:

repeated or significant (for a period of more than one month) violation by the debtor during the procedure of judicial rehabilitation of the deadlines for repayment of creditors' claims established by the debt repayment schedule;

presence of circumstances indicating that the debtor is not able to fulfill the debt repayment schedule.

The rehabilitation manager, on own initiative or on the basis of a decision of the committee of creditors, shall be obliged, within two weeks from the moment of the occurrence of the grounds specified in part one of this article, to convene a meeting of creditors to consider the issue of applying to the court with a petition for early termination of the judicial rehabilitation procedure.

The head of the debtor shall be obliged to submit to the meeting of creditors a report on the results of the execution of the debt repayment schedule and the plan of judicial rehabilitation. The report must be accompanied by the debtor's balance sheet as of the last reporting date, the debtor's income (profit) and loss statement, the register of creditors' claims indicating the amount of repaid claims, and documents confirming the repayment of creditors' claims. Simultaneously with the report of the head of the debtor, the rehabilitation manager shall submit to the meeting of creditors the opinion on the report of the head of the debtor.

Based on the results of considering the report of the head of the debtor, as well as the opinion of the rehabilitation manager on this report, the meeting of creditors shall have the right to decide to apply to the court with a petition for the introduction of an external management procedure or for declaring the debtor bankrupt and initiating liquidation proceedings. A copy of the protocol of the meeting of creditors, as well as complaints of creditors who voted against the decision taken by the meeting of creditors or did not take part in voting on this issue, shall be attached to the petition of the meeting of creditors.

The court, on the basis of the petition of the meeting of creditors, shall issue a ruling on the introduction of an external management procedure or adopt a decision on declaring the debtor bankrupt and initiating liquidation proceedings.

Article 104. Completion of Judicial Rehabilitation Procedure

Not later than fifteen days before the expiration of the established period of the judicial rehabilitation procedure, the head of the debtor shall be obliged to submit to the court a report on the results of the judicial rehabilitation procedure. This report must be accompanied by the debtor's balance sheet as of the last date, the debtor's financial results statement, the register of creditors' claims with indicating the amount of repaid claims and documents confirming this repayment, the conclusion of the rehabilitation manager on the report of the head of the debtor, complaints of creditors whose claims have not been repaid. The report of the head of the debtor on the results of the judicial rehabilitation procedure and the complaints of creditors shall be considered by the court at a session.

The rehabilitation manager shall be obliged to notify all creditors whose claims were included in the debt repayment schedule of the date, time and place of the court session to consider the debtor's manager's report on the results of the judicial rehabilitation procedure.

Based on the results of consideration of the report of the head of the debtor on the results of the judicial rehabilitation procedure, as well as the complaints of creditors, the court shall:

approve the report of the head of the debtor and issue a ruling on termination of the insolvency proceedings, if the outstanding debt is not revealed, and the creditors' complaints are recognized as unfounded;

refuse to approve the report of the head of the debtor, if the presence of outstanding debt is revealed and the creditors' complaints are recognized as substantiated.

In case of refusal to approve the report of the head of the debtor, the court shall issue a ruling on the introduction of an external management procedure or adopt a decision on declaring the debtor bankrupt and initiating liquidation proceedings.

Article 105. Fulfillment of Obligations by Persons Who Provided Security

The right of creditors to demand the fulfillment of obligations from the persons who provided the security shall arise from the moment the court issues a ruling on the termination or completion of the judicial rehabilitation procedure. Claims against persons who have provided security for the fulfillment of obligations shall be presented by a representative of the meeting of creditors (committee of creditors) or a rehabilitation manager.

Monetary funds received as a result of execution by persons who provided security for the fulfillment of obligations shall be transferred to the debtor's account for settlements with creditors. Settlements with creditors shall be carried out by the debtor.

From the moment of submission of evidence of repayment of creditors' claims, the rehabilitation manager shall make an appropriate entry in the register of creditors' claims.

Article 106. Report on Results of Fulfillment of Obligations Arising From Security

Upon completion of settlements with creditors or after the expiration of the period established by the court for repayment of creditors' claims, the rehabilitation manager shall be obliged to submit to the court a report on the results of execution of the debtor's obligations by the persons who provided the security. The report of the rehabilitation manager and the complaints of creditors shall be considered by the court at a session. The requirements for the report, as well as the procedure for its submission and consideration shall be established by Articles 132 and 133 of this Law.

Based on the results of consideration of the report of the rehabilitation manager, complaints of creditors, the court shall:

approve the report of the rehabilitation manager and adopt a decision to terminate the insolvency proceedings, if the outstanding debt is not revealed, and the creditors' complaints are recognized as unfounded;

refuse to approve the rehabilitation manager's report if the presence of outstanding debts is revealed and the creditors' complaints are recognized as substantiated, and issue a ruling on the introduction of an external management procedure or adopt a decision on declaring the debtor bankrupt and initiating liquidation proceedings.

Article 107. Consequences of Non-Fulfillment of Obligations by Persons Who Provided Security for Fulfillment of Obligations

In case of non-fulfillment of obligations by the persons who provided security for the fulfillment of obligations arising from the security provided, within the time period established by the court to satisfy the claims of creditors, and in the absence of grounds for introducing an external management procedure, the court shall adopt decision to declare the debtor bankrupt and initiate liquidation proceedings.

Failure to fulfill obligations by persons who provided security for the fulfillment of obligations arising from the security provided, within the period established in part one of this article, to satisfy the claims of creditors, shall entail joint and several or subsidiary liability of these persons for the obligations of the debtor to creditors in accordance with the legislation.

In this case, during the next insolvency procedure, the judicial manager shall have the right to apply to the court with a claim to the persons who provided the security.

Chapter 10 External Management Procedure

Article 108. Procedure for Introducing External Management Procedure

The external management procedure shall be introduced by the court on the basis of a petition from the meeting of creditors, an application from the authorized state body for the debtor, in the charter fund (authorized capital) of which there is a state share, if a real possibility of restoring the debtor's solvency is established.

A court ruling on the introduction of an external management procedure shall be subject to immediate execution and may be appealed (protested against) within the period established by legislation.

The external management procedure shall be introduced for a period of twelve to twenty-four months, unless otherwise provided by this Law.

At the petition of the meeting of creditors, the decision of the authorized state body or the application of the external manager, the established period of the external management procedure may be reduced or extended by the court within the time limits established by part three of this article.

The combined duration of judicial rehabilitation and external management procedures may not exceed thirty months.

If more than eighteen months have passed from the date of the introduction of the judicial rehabilitation procedure to the date of consideration by the court of the issue of the introduction of the external management procedure, the court shall decide on declaring the debtor bankrupt and initiating liquidation proceedings.

Article 109. Consequences of Introduction of External Management Procedure

Since the introduction of the external management procedure:

the head of the debtor shall be removed from the performance of duties, the management of the affairs of the debtor shall be entrusted to an external manager. The external manager shall be obliged to issue an order to terminate the employment contract with the head of the debtor or to transfer them to another job;

powers of the debtor's governing bodies shall be terminated. The powers of the head of the debtor and other management bodies of the debtor shall be transferred to the external manager, with the exception of the powers transferred in accordance with this Law to other persons (bodies). The debtor's management bodies, within three working days from the date of appointment of the external manager, shall be obliged to ensure the transfer of the accounting documentation and other documentation of the debtor, seals and stamps upon availability of seals and stamps), material and other valuables to the external manager;

previously taken measures to secure the claims of creditors shall be cancelled;

seizure of the debtor's property and other restrictions on the debtor's powers to dispose of their property may be imposed exclusively within the framework of insolvency procedures;

payment of all current tax payments (with the exception of payroll taxes and equivalent payments) incurred in the course of insolvency proceedings shall be suspended and shall be paid after the expiration of the external management procedure. In this case, these tax debts must be paid in equal installments within six months from the date of approval by the court of the report of the external manager and the ruling to terminate the insolvency proceedings against the debtor;

a moratorium shall be introduced on satisfying the claims of creditors for monetary obligations and (or) taxes and fees of the debtor, except for the cases provided for in Article 110 of this Law.

The fruits, products and income from the use of the debtor's property provided as security for the fulfillment of obligations prior to the introduction of the external management procedure, received after the introduction of this procedure, shall not be subject to the right of the creditor as security for the performance of their claims.

Upon termination of external management, the forfeit (fine, penalty fee), as well as the amounts of losses caused, which the debtor is obliged to pay to creditors for monetary obligations and (or) taxes and fees, may be presented for payment in the amounts that existed at the time of the introduction of external management.

Article 110. Moratorium on Satisfaction of Creditors' Claims

The moratorium on satisfaction of creditors' claims shall apply to monetary obligations and (or) taxes and fees, the due date for which came before the introduction of the external management procedure, with the exception of monetary obligations and (or) taxes and fees that arose after the introduction of the monitoring procedure for the debtor and (or) judicial rehabilitation procedures.

During the term of the moratorium on monetary obligations and (or) taxes and fees provided for in part one of this article:

collection on executive and other documents, the collection of which is carried out in an indisputable (non-acceptance) manner shall not be allowed;

forfeit (fine, penalty) and other economic (financial) sanctions for non-fulfillment or improper fulfillment of monetary obligations and (or) duties on taxes and fees shall not be charged, with the exception of monetary obligations that arose after the introduction of the monitoring procedure and (or) procedure of judicial rehabilitation in relation to the debtor, as well as payable interest.

Interest shall be accrued on the amount of the creditor's claims for monetary obligations and (or) taxes and fees at the time of the introduction of external management in the manner and amount provided for in Article 327 of the Civil Code of the Republic of Uzbekistan. These interest shall be accrued on the claims of one priority from the date of introduction of external management in relation to the debtor and until the date the court issues a ruling on the commencement of settlements with creditors for the claims of this priority or until the decision is adopted to declare the debtor bankrupt and commence liquidation proceedings. The amount of accrued interest shall be payable to the creditor simultaneously with the payment of the principal amount.

The moratorium shall also apply to creditors' claims for compensation for losses caused by the refusal of the external manager to execute transactions of agreements, in accordance with Article 119 of this Law.

The rules provided for by parts two and three of this article shall not apply to monetary obligations and (or) taxes and fees, the due date for which has come after the introduction of the external management procedure.

The moratorium shall not apply to the claims of citizens arising from labor relations, for the recovery of alimony and the payment of remuneration under copyright agreements, as well as to the claims of citizens to whom the debtor is liable for causing harm to life or health.

At the petition of the creditor, the court may issue a ruling on exclusion from the scope of the moratorium of monetary obligations for which property has been provided in favor of the specified creditor as security for the fulfillment of the obligations of the debtor, if the property is not necessary for external management.

At the petition of a creditor whose claims are secured by the debtor's property, the court may issue a ruling on the exclusion of this property from the moratorium in cases where:

amount of claims of the creditor or creditors secured by the debtor's property exceeds the value of the subject of pledge;

there is no protection against a decrease in the value of the pledged property;

implementation of the external management plan does not affect claims secured by the debtor's property;

it is required to take measures to preserve the pledged property as a perishable product;

judicial rehabilitation plan or the external management plan was not approved within a certain period of time.

Article 111. Procedure for Submitting Candidate for External Manager

The meeting of creditors which has decided to apply to the court for the introduction of an external management procedure shall approve the candidature of an external manager.

The candidacy of an external manager may be proposed to the meeting of creditors by any of the creditors or by an authorized state body.

The court shall be offered the candidate of an external manager who received the largest number of votes of creditors, in accordance with the procedure for adoption of decisions by the meeting of creditors, provided for in Article 17 of this Law.

In the event that the external management procedure is introduced by the court in the absence of a decision of the meeting of creditors to apply to the court with a petition for the introduction of the external management procedure, the meeting of creditors shall have the right to consider, approve and submit to the court the candidature of the external manager within three weeks from the date the court issues a ruling on the introduction of the external management procedure.

In the event that the meeting of creditors does not propose a candidate for an external manager, the court shall appoint an external manager from among the candidates proposed by the authorized state body.

Article 112. Appointment of External Manager

The external administrator shall be appointed by the court simultaneously with the introduction of the external management procedure.

Where it is not possible to appoint an external manager simultaneously with the introduction of external management, the court shall appoint an external manager within a month from the date of the introduction of the external management procedure.

The court shall issue a ruling on the appointment of an external manager.

The court ruling on the appointment of an external manager shall be subject to immediate execution and may be appealed (protested).

Article 113. Release of External Manager from Performance of Duties

An external manager may be released by the court from the performance of duties in the following cases:

according to their application;

failure to perform or improper performance of the duties assigned to them, on the basis of a decision of the meeting of creditors. The decision of the meeting of creditors in this case must contain information about the candidacy for the new external manager;

based on the application of the authorized state body;

revealing circumstances in accordance with Articles 22 of this Law that prevent the appointment of a person as an external manager.

An external manager may be released from the performance of duties in other cases in accordance with the legislation.

The court ruling on the release of the external manager from the performance of duties shall be subject to immediate execution and may be appealed (protested). An appeal (protest) against the said ruling shall not suspend its execution.

Article 114. Rights of External Manager

The external manager shall exercise the powers of the head of the debtor.

The external manager shall have the right to:

convene a meeting of creditors and a committee of creditors;

dispose of the debtor's property with the restrictions provided for in Article 118 of this Law;

enter into a settlement agreement on behalf of the debtor;

receive remuneration in accordance with Article 26 of this Law;

engage other persons for performing their functions on a contractual basis with payment for their activities from the debtor's funds, unless otherwise provided by this Law or an agreement with creditors;

apply to the court for early termination of the performance of their duties;

submit to the court an application for invalidating the debtor's contracts in the manner prescribed by Articles 63 — 65 of this Law;

receive loans from commercial banks, financial institutions to restore the debtor's solvency, as well as receive financial assistance from legal entities and natural persons interested in continuing the debtor's activities;

request information and documents related to the debtor from the head of the debtor, the founders of the debtor and (or) state bodies;

to use public services, including services provided through public service centers, without making advance payments to ensure the exercise of their rights and fulfillment of their obligations;

declare a refusal to perform the debtor's contracts in the manner prescribed by Article 119 of this Law.

When exercising their rights and obligations, the external manager shall have the right to make claims against persons who, in accordance with the legislation, bear subsidiary liability for the debtor's monetary obligations in connection with bringing them to insolvency.

The external manager may also have other rights in accordance with the legislation.

Article 115. Obligations of External Manager

The external manager shall be obliged to:

accept the debtor's property and conduct its inventory;

take measures aimed at searching, identifying and returning the debtor's property held by third parties;

open a special account for external management and settlements with creditors;

develop and submit for approval to the meeting of creditors an external management plan;

maintain financial, accounting, statistical records and provide reporting;

raise objections to the claims of creditors against the debtor;

take measures to collect the debt to the debtor;

maintain a register of creditors' claims;

submit reports to the meeting of creditors on the progress and results of the implementation of the external management plan;

provide, at the request of the creditor, within ten days, information on the financial condition of the debtor and (or) their activities;

provide information on the implementation of the external management plan to the meeting of creditors and the committee of creditors, as well as to the authorized state body, if there is a state share in the charter fund (authorized capital) of the debtor.

The external manager may also have other obligations in accordance with the legislation.

Article 116. Claims of Creditors

Creditors shall have the right to present their claims against the debtor at any time during the term of the external management procedure. These claims shall be forwarded to the external manager at the postal address of the location and (or) the electronic postal address of the debtor. Claims of creditors recognized as established in accordance with paragraph four of this article shall be sent to the external manager with documents attached, which make it possible to determine the said claims as established.

The external manager shall consider the claims of creditors and, based on the results of their consideration, make an appropriate entry in the register of creditors' claims no later than two weeks after receiving the respective claim. The external manager shall notify the relevant creditor of the results of the consideration within a period not exceeding one month from the date of receipt of the creditor's claims.

Objections based on the results of consideration by the external manager of the creditors' claims may be filed by the creditor with the court considering the insolvency case within one month from the date of receipt of the notification.

Claims of creditors for which no objections have been filed within the period provided for by part three of this article shall be considered established in the amount, composition and priority of satisfaction determined by the external manager.

The creditor may independently transfer the right of claim from the debtor to other persons in a notarial procedure. In this respect, the person who has acquired the right to claim must apply to the debtor's external manager within ten days to include the claim in the register of creditors' claims.

Article 117. Consideration of Objections of Creditors

Objections of creditors regarding the amount, composition and order of satisfaction of their claims, determined by the external manager, filed within the time limits specified in Article 116 of this Law, shall be considered by the court no later than one month from the date of receipt of the said objections.

Based on the results of consideration of the creditors' objections, a court ruling shall be issued, which shall indicate the amount, composition and order of satisfaction of the creditors' claims, in respect of which the creditors' objections are recognized as substantiated.

A court ruling issued based on the results of considering objections of creditors may be appealed (protested against). Rulings and other judicial acts issued when considering creditors' objections in an insolvency case shall have prejudicial effect when considering creditors' claims against a debtor in a separate proceeding.

In the manner prescribed by this article, the objections of the representative of the debtor's employees on the amount and composition of arrears in wages and payment of severance pay to persons working under an employment contract shall also be considered.

Article 118. Disposition of Debtor's Property

The owner of the debtor's property or the bodies authorized by the constituent documents shall not be entitled to adopt decisions or otherwise limit the powers of the external manager to dispose of the debtor's property, except as otherwise provided by this Law.

Major transactions and transactions in which there is an interest shall be made by an external manager only with the consent of the meeting of creditors or the committee of creditors, unless otherwise provided by this Law or the external management plan.

Major transactions shall include transactions involving the disposal of immovable property or other property of the debtor, the balance sheet value of which exceeds ten percent of the balance sheet value of the debtor's assets at the time of the transaction.

Transactions in which there is an interest shall be recognized as transactions, the parties to which are interested parties in relation to an external manager or creditor.

Article 119. Refusal to Execute Debtor's Contracts

A court ruling on the introduction of an external management procedure cannot be a basis for suspending or refusing to execute contracts and other transactions of the debtor concluded before the initiation of an insolvency case. The external manager, except for cases provided by this Law, shall continue the execution of contracts concluded before the initiation of the debtorʼs insolvency proceedings, which are considered important for the continuation of the debtorʼs activities. In this respect, the agreement of the parties on the suspension of execution or refusal to execute contracts concluded by the debtor in connection with the introduction of an external management procedure in relation to the debtor shall be considered invalid, except for cases provided by this Law.

The external manager shall have the right to refuse to execute the debtor's agreements concluded before the initiation of insolvency proceedings, only in respect of agreements that have not been executed by all parties in whole or in part, in the existence of one of the following circumstances:

execution of the debtor's contracts will cause losses for the debtor and (or) in comparison with similar contracts concluded under comparable circumstances, violate the rights and legitimate interests of the debtor, creditors;

contract is long-term (concluded for a period of more than one year) or is designed to obtain positive results for the debtor only in the long term;

contract provides for preferential satisfaction of the claims of one creditor in comparison with the claims of other creditors;

presence of other circumstances preventing the restoration of the debtor's solvency.

In the cases provided for by part two of this article, the contract shall be deemed terminated from the moment all parties under such contract receive an application from the external manager about refusal to perform the contract.

The party to the contract, in respect of which the refusal of the debtor is declared, shall have the right to demand compensation from the debtor for real damage caused by the refusal to perform the contract.

Article 120. Monetary Obligations of Debtor Arising In Course of External Management

In cases where the amount of the debtor's monetary obligations arising in the course of the external management procedure exceeds twenty percent of the amount of creditors' claims in accordance with the register of creditors' claims, transactions which involve new monetary obligations of the debtor, may be performed by the external manager only with the consent of the meeting of creditors or the committee of creditors, with the exception of those provided for by the external management plan.

Transactions made in violation of part one of this article may be declared invalid by the court upon the application of the creditor, as well as of the newly appointed external manager, if they were made by a person who previously acted as the external manager of the debtor.

Article 121. Regulation of Debtor's Expenses

Decisions entailing an increase in the debtor's expenses for consumption, including for wages, may be adopted by the external manager only with the consent of the meeting of creditors or the committee of creditors, except as otherwise provided by legislation.

Article 122. External Management Plan

The external manager, within a month from the date of their appointment by the court, must develop an external management plan, which they shall submit for approval to the meeting of creditors.

When considering the issue of approving the external management plan, creditors of the first and second groups shall participate in the voting.

The decision of the creditors' meeting with respect to approval of the external management plan shall be considered adopted if the majority of creditors' votes in each of the first and second groups voted for it. In this respect, the creditor or creditors with the right to vote and who voted against the external management plan shall be entitled to receive a guaranteed compensation at least equal to what they would have received in the event of the liquidation of the debtor.

In the event that the creditors of each of the first and second groups do not make a decision to approve the external management plan, and the required number of votes of the creditors of one of the groups is not collected during the voting, a decision to apply to the court with a petition to declare the debtor bankrupt and start liquidation proceedings shall be adopted.

The decision of the meeting of creditors to approve amendments to the external management plan shall be adopted by the creditors of the first and second groups, if the majority of the number of votes for each group separately voted for it.

The external management plan should include:

measures to restore the solvency of the debtor, the conditions and procedure for the implementation of these measures, the costs of their implementation and other expenses of the debtor;

period for restoring the debtor's solvency.

The solvency of the debtor shall be recognized as restored in the absence of signs of insolvency and (or) refusal of creditors from the stated claims established by Article 5 of this Law.

Creditors who voted against the approval of the external management plan, in order to protect their rights, may involve experts to verify:

right of the creditor with the right to vote and voted against the approval of the external management plan, and the creditor without the right to vote to receive guaranteed compensation at least equal to what they would receive in the event of liquidation of the debtor;

possibility of successful implementation of the external management plan;

priority right of creditors secured by the debtor's property over other creditors.

If the external management plan provides for the reduction or cancellation of the debtor's claim, this shall be carried out in accordance with Article 100 of this Law.

At the request of a meeting of creditors or a committee of creditors, the external administrator shall report to the creditors on the course of the external management procedure.

The implementation of the external management plan should not lead to the termination of the debtor's economic activities, except in cases where the buyer of the debtor's property assumes the obligation to satisfy monetary obligations and (or) on taxes and fees that arose after the initiation of an insolvency case.

Article 123. Consideration of External Management Plan

The external management plan shall be considered by the meeting of creditors, which is convened by the external manager no later than two months after the introduction of the external management procedure. The external manager, as necessary, shall notify all creditors of the date, time and place of the meeting of creditors and provide them an opportunity to familiarize themselves with the external management plan at least two weeks before the date of the meeting.

An external manager, a representative of the founders (participants) or the owner of the debtor's property and a representative of the debtor's employees shall have the right to participate in the meeting of creditors with the right of an advisory vote.

The external management plan shall be considered approved if more than half of the votes of the creditors present at the meeting voted for it.

The meeting of creditors shall have the right to adopt one of the following decisions:

on approval of the external management plan;

on rejection of the external management plan and filing a petition with the court to declare the debtor bankrupt and initiate liquidation proceedings;

on rejection of the external management plan and applying to the court for release an external manager from the duties with simultaneously approval of the candidacy of a new external manager. The said decision must provide for the date of convening the next meeting of creditors to consider a new external management plan, and this period may not exceed one month from the date of adoption of this decision by the meeting of creditors.

The external management plan approved by the meeting of creditors and the protocol of the meeting of creditors shall be submitted to the court by the external manager no later than two days from the date of the meeting of creditors.

If the external management plan is not submitted to the court within the period provided for by part five of this article, the court shall have the right to decide on declaring the debtor bankrupt and initiating liquidation proceedings.

Article 124. Extension of Period of External Management

In the event that the meeting of creditors decides to approve the external management plan, which provides for a period of the external management procedure that exceeds the originally established one, the court shall issue a ruling on the extension of the period of the external management procedure, if there are sufficient grounds to believe that the extension of the period of the external management procedure or the implementation of approved external management plan will restore the debtor's solvency. In this respect, the total period shall not exceed the periods established by Article 108 of this Law.

Article 125. Measures to Restore Solvency of Debtor

The external management plan may provide for the following measures to restore the debtor's solvency:

re-profiling of production;

closure of unprofitable manufactures;

collection of receivables;

sale of a part of the debtor's property;

assignment of the debtor's claims;

fulfillment of the debtor's obligations by third parties;

placement of additional shares of the debtor;

sale of the enterprise (business) of the debtor as a property complex;

borrowing funds from commercial banks, financial institutions, as well as raising funds from persons interested in continuing the activities of the debtor;

decision to increase the charter fund (authorized capital) of a joint-stock company at the expense of accounts payable (conversion of debt into shares) shall be adopted by a three-quarters majority (qualified majority) of the votes of shareholders who are the owners of voting shares present at the general meeting of shareholders;

replacement of the debtor's assets.

The external management plan may provide for other measures to restore the debtor's solvency.

In addition to the measures provided for by part one of this article, upon the proposal of the authorized state body, the court may issue a ruling on the conservation of inactive objects of the debtor, in the charter fund (authorized capital) of which there is a state share.

Article 126. Sale of Debtorʼs Enterprise (Business) as Property Complex

In order to satisfy creditors' claims, the external management plan may provide for the sale of the debtor's enterprise (business) as a property complex.

When selling an enterprise (business) as a property complex, all types of property intended for the debtorʼs entrepreneurial activities shall be alienated, including land plots, buildings, structures, equipment, inventory, raw materials, products, rights of claim, as well as means that individualize the debtor (company name, trademarks, service marks), its goods, works and services, other exclusive rights belonging to the debtor, with the exception of rights and obligations that cannot be transferred to other persons.

When selling an enterprise (business) as a property complex, the assessment of the debtor's property shall be carried out by an appraisal organization with payment for its services at the expense of the debtor's property. An appraisal organization shall be approved by a meeting of creditors or a committee of creditors.

If the funds on the debtor's account are insufficient for assessment of their property, the external manager must notify the creditors of this. In this case, the costs of assessment of the debtor's property shall be borne by the creditors, and these costs shall be reimbursed out of turn in the manner prescribed by part one of Article 150 of the Law, from the funds received on the debtor's account as a result of the sale of the debtor's property.

If necessary, the persons participating in the insolvency case may require an examination of the validity of the debtor's property assessment report.

With the consent of the meeting of creditors, the external manager shall have the right to sell the enterprise (business) as a property complex in installments for a period of not more than one year, provided that the buyer provides appropriate guarantees from the servicing bank.

When selling an enterprise (business) as a property complex, employment contracts that are in force at the time of the sale of the enterprise (business) as a property complex shall remain in force, and the rights and obligations of the employer shall be transferred to the buyer of the enterprise (business) as a property complex.

The sale of an enterprise (business) as a property complex shall be carried out through an electronic online auction, unless otherwise provided by this article. The conditions for bidding in the form of an electronic online auction shall be determined by the meeting of creditors or the committee of creditors.

In the event that an enterprise (business) as a property complex includes property related to limited transferable property, the sale of an enterprise (business) as a property complex shall be carried out by holding a closed bidding in the form of an electronic online auction with the participation of persons who, in accordance with the law may have the specified property on the right of ownership or other real right.

The initial sale price of an enterprise (business) as a property complex, which is put up for bidding in the form of an electronic online auction, shall be set by a decision of a meeting of creditors or a committee of creditors, with account taken of the assessment of the property of an enterprise conducted by an appraisal organization, unless otherwise provided by legislation.

The terms of bidding in the form of an electronic online auction must provide for the debtor to receive funds from the sale of an enterprise (business) as a property complex no later than thirty days before the expiration of the external management procedure.

The external manager shall engage a specialized organization to organize bidding in the form of an electronic online auction and pay for its services at the expense of the debtor's property. A specialized organization conducting bidding in the form of an electronic online auction cannot be an interested party for the debtor and the external manager and must be agreed upon by the meeting of creditors or the committee of creditors.

Specialized organization shall:

publish on the official website a message about the sale of an enterprise (business) as a property complex in the bidding in the form of an electronic online auction;

accept electronic applications from bidders for participation in the bidding in the form of an electronic online auction;

ensure openness and transparency in the organization of bidding in the form of an electronic online auction;

determine the winner of the auction and draws up a protocol on the results of the bidding.

The announcement of the sale of an enterprise (business) as a property complex in the bidding in the form of an electronic online auction must be given in the media at least thirty days before the date of the bidding. The announcement of the sale of an enterprise (business) as a property complex in the bidding in the form of an electronic online auction, must indicate the following:

information about the enterprise (business) as a property complex and the procedure for familiarization with it;

terms, time of participation in the bidding in the form of an electronic online auction and the website of the organizer of the auction;

initial sale price of an enterprise (business) as a property complex;

time of conducting and summing up the results of the bidding in the form of an electronic online auction and the website of the auction organizer.

conditions and terms of the conclusion of the contract of sale and payments.

The announcement of the sale of an enterprise (business) as a property complex in the bidding in the form of an electronic online auction may contain other information in accordance with the legislation.

If during the period specified in the announcement of the sale of an enterprise (business) as a property complex in the bidding in the form of an electronic online auction, not a single application was received or an application was received from one participant, the bidding shall be recognized as failed and repeated bidding shall be held in the form of an electronic online auction on the terms provided for in parts ten to thirteen of this article. Repeated bidding in the form of an electronic online auction shall be held also in cases where the enterprise (business) as a property complex was not sold at the first bidding of an electronic online auction.

In order to conduct repeated bidding in the form of an electronic online auction, the external manager, within fifteen days from the date of the bidding declared invalid or at which the enterprise (business) as a property complex was not sold, in accordance with the decision of the meeting of creditors or the committee of creditors, shall publish a new message about sale of an enterprise (business) as a property complex in the manner prescribed by this article and article 54 of this Law. In this respect, bidding in the form of an electronic online auction shall be held within a period of not less than fifteen days from the date of publication of the message. The sale price of an enterprise (business) as a property complex may be gradually reduced by decision of a meeting of creditors or a committee of creditors, while the amount of reduction should not exceed ten percent of the previous bidding price. If an enterprise (business), which is being sold as a property complex, is not sold with a reduction of up to twenty percent from the initial price of the initial sale, the starting price of the next repeated bidding may be determined by agreement with the meeting of creditors. In this respect, the size of the reduction should not exceed fifty percent of the initial price of the initial sale.

The contract for the sale of an enterprise (business) as a property complex shall be concluded between the winner of the bidding in the form of an electronic online auction and an external manager no later than ten days from the date of the announcement of the results of the bidding. The person who won the bidding in the form of an electronic online auction and the organizer of the bidding shall draw up a protocol on the results of the bidding on the day of the bidding, which shall have the force of a contract. The person who won the bidding shall lose the deposit made by them, if they avoid signing the protocol on the results of the bidding or the contract for sale. The amount of the deposit in this case shall be included in the debtor's asset, minus the costs of the organizers for conduct of the bidding in the form of an electronic online auction.

If the enterprise (business) has not been sold as a property complex on the terms provided for by part fourteen of this article, the external manager, by decision of the meeting of creditors, unless otherwise provided by this Law, may put the enterprise (business) as a property complex for a public offer and conclude no earlier than fifteen days after the publication of the proposal for a public offer in the mass media, a contract for the sale of an enterprise (business) as a property complex with the person who offered the highest price for it.

The decision to put up for a public offer shall be considered adopted if two-thirds of the creditors voted for it, and in this respect, the initial sale price of the enterprise (business) as a property complex proposed for the offer should not be less than the initial price set at the previous bidding in the form of electronic online auction.

In cases where the debtor has the possibility to satisfy the claims of creditors in full from the proceeds from the sale of an enterprise (business) as a property complex, the insolvency proceedings shall be subject to termination by the court at the request of the external manager.

If the proceeds from the sale of an enterprise (business) as a property complex are not sufficient to satisfy the creditors' claims in full, the external manager shall propose to the creditors to conclude a settlement agreement. If a settlement agreement is not reached, the court, upon the application of the external manager, shall adopt decision to declare the debtor bankrupt and initiate liquidation proceedings.

The proceeds from the sale of an enterprise (business) as a property complex shall be subject to distribution in the order of priority provided for in Articles 149 , 150 and 185 of this Law.

https://neolex.uz/en/laws/law-5957616