June 14, 2023
The order of repayment of claims
1. The order of repayment of claims in case of insolvency.
2. The order of repayment of claims in case of liquidation.
3. Priority of repayment of claims in case of bank write-off.
1. The order of repayment of claims in case of insolvency
Regulatory legal acts:
- The Law “On Insolvency” No. LRU-763, effective date April 13, 2022.
Insolvency refers to the situation of an economic entity in which, for one reason or another, it is unable to satisfy the monetary claims of creditors, in due time and in full, arising as a result of the obligations assumed.
In this paragraph, we will describe the order of repayment of claims in case of insolvency under the legislation of Uzbekistan.
Out of turn, the court costs associated with the payment are covered:
– remuneration to judicial managers;
– current utility and maintenance payments;
– expenses for insurance of the debtor’s property that arose after the initiation of insolvency proceedings;
– claims of citizens to whom the debtor is responsible for causing harm to life or health.
This list does not include:
– creditors’ claims filed after the deadline for filing claims;
– claims for taxes and fees that arose after the start of liquidation proceedings, regardless of the time of their presentation.
Such claims are satisfied after the repayment of creditors’ claims filed within the prescribed period.
First of all, the following claims are repaid:
– according to payment (executive) documents providing for the issuance of funds for the payment of wages;
– according to executive documents providing for the transfer or disbursement of funds from the debtor’s single account to meet the requirements for the recovery of alimony;
– on the payment of remuneration under copyright agreements, ensuring an equal degree of fulfillment of the debtor’s obligations on payments and claims arising from labor and legal relations equated to them;
– citizens’ claims for compensation for damage caused to their property by a crime or administrative offense.
In the second place, the claims for:
– taxes and fees;
– compulsory insurance;
– bank loans and bank loan insurance,
– claims of creditors secured by collateral, in terms of uncovered debt due to insufficient amount received from the sale of pledged property – the subject of pledge;
– claims of creditors not secured by collateral.
In the third place, the requirements of the owners of shares on accrued dividends are satisfied.
In the fourth turn, all other claims are repaid.
The requirements of each subsequent queue are satisfied after the requirements of the previous queue have been repaid in full.
A special announcement in the mass media about the production of the last payment is published.
If the amount to fully satisfy all the claims of one queue is not enough, then these claims are satisfied in proportion to the amount due to each creditor.
The remaining value of the property after satisfying the creditors’ claims and paying the costs of conducting the insolvency case, as well as unsold property in the process of liquidation, is received by the founders (participants) or the owner of the property of the liquidated debtor.
The debtor’s property offered for sale, but unrealized during the liquidation proceedings, is offered to creditors by the liquidation managers to repay the accounts payable. The creditor, within 10 days from the date of receipt of the proposal for the unrealized property, notifies the liquidation manager in writing of the consent or refusal to accept the specified property or the submission of this issue to the supervisory board or the general meeting of the founders (participants) of the creditor.
If the creditor does not send a written notice of refusal or acceptance of the property within 10 days from the date of receipt of the offer, then this is considered a rejection of the property offered to him.
The liquidation manager notifies the local state authorities in writing about such property. Within 15 days from the date of receipt of the notification, local public authorities accept the property on the balance sheet and bear all expenses for its maintenance.
2. The order of repayment of claims in case of liquidation
Regulatory legal acts:
- Decree of the President of the Republic of Uzbekistan dated 07.06.2019 No. DP-5739 “On measures to simplify the procedure for liquidation of business entities”;
- Appendix No. 1 to the RCM of the Republic of Uzbekistan dated 21.08.2019 No. 704 “Regulations on the procedure for voluntary liquidation of business entities and termination of their activities”.
Liquidation of an enterprise is the process of termination of the existence of a legal entity by excluding its registration data from the Unified State Register of Legal Entities with mandatory repayment of all claims and obligations imposed on it.
There are two types of liquidation processes: voluntary and compulsory. The difference is that the compulsory liquidation of a legal entity takes place by a court decision. The procedure for repayment of creditors’ claims in both cases is identical.
Below is the order of repayment of claims during the liquidation process.
After the expiration of the period established for the submission of claims by creditors, the liquidator draws up a draft interim liquidation balance sheet, taking into account the results of the audit of the financial and economic activities of the liquidated company conducted by the state tax service, as well as the register of executive documents (for step-by-step instructions for necessary actions in case of voluntary liquidation, look here: https://azizovpartners.uz/ru/2020/12/14/poryadok-dobrovolnoj-likvidacii-juri /).
The interim final balance sheet is approved by the founders (participants) of the liquidated legal entity. Within 5 working days after the approval of the interim liquidation balance sheet, the liquidator notifies all creditors in writing (in electronic form) of the recognition or rejection of their claims and the amount of the recognized claims.
Settlements with creditors are made in the following order:
First of all, the requirements of citizens arising from legal relations are satisfied in connection with:
– labor relations;
– a collection of alimony;
– cash payments under copyright agreements;
– claims of persons, as a result of the harm caused to their life and health.
The above requirements are repaid by making appropriate timely payments.
In the second place, payments to the state budget and target state funds are repaid.
In the third turn, the claims of the remaining creditors are satisfied.
The claims of creditors secured by a pledge are satisfied at the expense of funds received as a result of the sale of the pledged property at closed auctions with the participation of persons who have the right of ownership of this property (whose claims are secured by this property). The balance of these funds is directed to the satisfaction of creditors’ claims in the manner specified above.
The property that has not been sold within 2 months from the date of sale is proposed to be taken into ownership by creditors at market value in the order indicated above.
When transferring property to other creditors, its market value is credited to the payment of claims, and the difference between the market value and the amount of the claim is returned by creditors within 5 working days.
Creditors’ claims may also be satisfied at the expense of the founders’ (participants’) funds sent to the bank accounts of the liquidated company.
3. Priority of repayment of claims in case of bank write-off
Regulatory legal acts:
- Instructions on the procedure for debiting funds from the bank accounts of economic entities. Appendix to the Resolution of 12.12.2011 of the Board of the CB No. 35/4, MF No. 82, and STC No. 2011-41 registered by the Ministry of Justice on 15.03.2012 No. 2342.
If there are sufficient funds in the main deposit account of a legal entity, the write-off is carried out in accordance with the procedure established by law by order of the client and in the order of receipt of other monetary settlement documents.
If there are not enough funds on the main account to satisfy the submitted claims, then monetary settlement documents are recorded in card file No. 2 (payment documents for which there are not enough funds on the settlement account).
If there is a card file No. 2 in the bank where the company’s main account is opened, payments are made in the following sequence:
Out of turn, payments for urgent needs related directly to production activities or the provision of services are debited.
Economic entities, based on the specifics of their activities, taking into account the costs directly related to the production (provision of services), as well as the costs of the services of the security units of particularly important objects, determine the list of necessary expenses.
First of all, a proportional write-off is made according to payment (executive) documents providing for:
– payments to the budget, to extra-budgetary funds, and the issuance of funds for the payment of wages;
– payments under executive documents providing for the transfer or disbursement of funds from the account to meet the requirements for the recovery of alimony;
– payments for the payment of remuneration under copyright agreements;
– payments for compensation for damage caused to life and health arising from labor and legal relations equated to them.
In the second place, the following obligations are fulfilled in the order of the calendar order:
– payments on collection orders under other executive documents;
– payments on the client’s claims submitted for the repayment of urgent loans issued under the Government guarantee and not returned on time, and interest accrued on them;
– budget loans, credit lines issued at the expense of the State Budget of the Republic of Uzbekistan, and interest accrued on them;
– arrears on loans issued at the expense of the resources of the Fund for Reconstruction and Development of the Republic of Uzbekistan, and payments on them.
In the third turn, a write-off for other monetary claims submitted to the main account of the company is made, according to the date of receipt of payment documents in the order of calendar priority.