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Recovery

Recovery, also called Composition with creditors is an institute, used by the debtor – business entity to avoid the bankruptcy. In that case the sell-out of the debtor’s assets does not apply.  In this proceeding, the judicial protection against creditors, especially the distraints of debtor, the conduction of security rights etc. is granted to the debtor. In this case, the contracted partners are required to cooperate with the debtor and to continue working with him on the basis of concluded contracts (not to denounce, withdraw from them, set off a claim, etc.)

The main goal of composition is to maintain the company of debtor in economic activity.  Another aim is to achieve the economic salvation of the debtor, who will partially satisfy the claims of enrolled creditors due to the composition plan, and the rest of claims is terminated. Creditors, who do not enrolled their claims, loses the right to enforce them. This process is led under the supervision of trustee,  who is chosen and declared by the debtor. It is essential for You to choose a experienced trustee, who is willing to cooperate with the debtor. The debt-free company of the debtor continues working, free of the obligations in the business.  This model is even in the favour of creditors, because the satisfaction of their claims in composition with creditors should always be bigger, than in an bankruptcy liquidation (sell-out of the debtor’s assets).

 

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