We successfully represented our client before the Supreme Court of Lithuania in a case over the possibility of appealing the initiation of insolvency proceedings by cassation. The court dismissed the opponent’s claim and established the case law that cassation of a court’s decision to initiate insolvency proceedings is not possible.
The new case law ensures that insolvency proceedings are effective
The previous laws on corporate insolvency and corporate restructuring were replaced in 2020 by the new Law on Insolvency of Legal Entities. The legal acts which regulated the insolvency proceedings of legal persons before the new law entered into force directly established that cassation on a court ruling on the opening of insolvency proceedings is not possible. The new law did not prohibit it directly, which gave rise to a dispute.
The court reasoned that its ruling on insolvency proceeding ensured that the main goals of the new Law on Insolvency of Legal Entities are met, including the goal of ensuring a fast and efficient insolvency process.
Greta Kubiliūnaitė, an associate representing the client, comments: “The case law established by the Lithuanian Supreme Court prevents abuse by dishonest legal entities and ensures that the insolvency process is efficient and carried out within specified deadlines, thus ensuring a balance of interests between the debtor and creditors.”