Debt Restructuring and Insolvency: Ukrainian Trends

During the period of financial crisis in Ukraine, debt restructuring became a question of great importance which is being broadly discussed and implemented by banks, other financial institutions and corporate borrowers with significant debt portfolio. In the new financial reality all interested parties realised that, in most cases related to the debtor's insolvency, better results could be achieved outside any formal insolvency (bankruptcy) proceedings. This often requires implementation of certain restructuring arrangements aimed at the improvement of the debtor's financial position and its rehabilitation.

OUT-OF-COURT DEBT RESTRUCTURING TRENDS

Typically, corporate debt restructurings, also known as workouts, are implemented outside any formal insolvency (bankruptcy) procedures. Out-of-court debt restructuring procedures in Ukraine are usually less expensive and represent a preferable alternative to bankruptcy. The main costs associated with such procedures are