(a) In relation to each type of insolvency procedure available in the legal system of this economy, what assets of the corporate debtor are available to its administrator to satisfy the claims of its creditors?

 

• In case of reorganization, all creditors (secured, unsecured and preferred) shall follow the reorganization plan approved by the court to satisfy their claims. No such assets are available.
• In case of special liquidation, all creditors (secured, unsecured and preferred) shall follow the proposal resolved in the creditors meeting and approved by the court to satisfy their claims. No such assets are available
• In case of composition, all unsecured creditors shall follow the composition proposal approved by the court, and the secured creditors and preferred creditors agreeing to the composition proposal shall also follow the proposal although they are entitled to exercise their right regardless of such proposal. No such assets are available..
• In case of bankruptcy, all assets of the corporate debtor other than (i) those held by secured creditors or preferred creditors and (ii) those exclusively belonging to the bankrupt or those non-attachable property are available for the satisfaction of creditors' claims in general. The secured creditors and preferred creditors are entitled to exercise their rights regardless of the bankruptcy procedures.

(a) To what extent and in what circumstances may the administrator of a corporate debtor take steps to recover assets of the debtor by overturning past transactions involving property of the debtor? (for example preferences given to certain creditors over others, invalid charges granted by the debtor, uncommercial transactions entered into by the debtor, profits on sales to and from the debtor at an undervalue or overvalue.)

 

The trustee in bankruptcy may overturn the past transaction involving the properties of the organization in the following circumstances:

• apply to the court and repudiate any gratuitous or onerous acts done by the bankrupt prior to the adjudication of bankruptcy, if such acts are prejudicial to the creditors' rights and are repudiatable in accordance with the provisions of the Civil Code.
• repudiate the following acts done by the bankrupt within six months before the adjudication of bankruptcy: (a) furnishing securities for outstanding debts (except that the bankrupt has promised six months before the adjudication of bankruptcy that security will be furnished for such debts) and (b) repaying debts which are not yet due.
• The reorganizer has no such power.
• The supervisor in composition has no such power.
• The liquidator of a corporate debtor has no such power.

(b) What powers or mechanisms are available to each type of administrator for investigation of the affairs of the corporate debtor, for examination of persons formerly involved in the management or control of the debtor, and for the discovery of assets of the debtor?

 

• The trustee in bankruptcy may do the following investigations:
  • ² request the statement on the status of the bankrupt's assets and a list of its creditors and debtors from the bankrupt.
  • ² request all the books and documents relevant to the bankrupt's properties and all the properties in the bankrupt's custody to be handed over by the bankrupt.
  • ² inquire the bankrupt to answer the questions in connection with its properties and business.
• Examiner in reorganization shall:
  • ² complete the examination and report to the court, within 30 days after appointment, in respect of (a) the actual business, financial condition, and evaluation of the assets of the company, (b) whether the business is still worthy of operation according to the standard of reasonable financial expenditure, (c) whether there was any neglect or improper act on the part of the responsible persons of the company in the performance of their duties, and (d) whether there is any fraudulent or false statement in the petition.
  • ² inspect all books, records of accounts, documents and property relating to the business or financial condition of the company.
• Liquidator shall do the following investigations:
  • ² inspect the corporate debtor's properties and make the balance sheet and submit the same to the supervisor and the shareholders' meeting for approval.

(c) What procedures may be employed by each type of administrator for the recovery of assets of the corporate debtor which are available for distribution to creditors? (for example initiation of legal proceedings, compensation from directors.)

 

• The trustee in bankruptcy will take the place of the bankrupt to recover the property in accordance with the law or the contract(s) in existence.
• No such power is granted to the composition supervisor, liquidator or reorganizer.