EFFECT OF RULING ON INSTITUTION OF BANKRUPTCY PROCEEDINGS

The bankruptcy proceedings shall be considered instituted as from the date of the ruling under Article 630 paragraph 1. In case any actions under Articles 635, 636 paragraph 1, Articles 637, 638 and 646 are undertaken on this date, it shall be considered they are undertaken after the institution of bankruptcy proceedings.

(1)

The court shall rule in three days term on claims of participant in the proceedings except other term is provided for in the IV of this Law. In case the court's act by which it shall rule, is subject to appeal, the court of appeal shall rule within seven days from the receipt of the complaint and shall give obligatory instructions.

(2)

If the judge that shall rule the case is absent, the chairman of the court of bankruptcy shall appoint another judge who shall rule the case during the absence.

(3)

Upon claim for resignation, the judge shall rule on it immediately.  The definition which leaves without consideration the claim for resignation shall be subject to appeal to the chairman of the court of appeal, who shall rule on it within 3 days from the receipt.

(1)

The activities of the debtor, the creditors, the committee of the creditors, the meeting of the creditors, the assignee in bankruptcy as well as the acts of the bankruptcy court, shall be entered in a separate book which shall be public and be at disposal at the office of the bankruptcy court. In the same book shall be entered the decisions and definitions of the appeal and cassation court on  complaints against acts of the bankruptcy court. 

(2)

Notices shall be send to the parties under the terms and conditions of the Civil Procedure Code for the decisions and definitions of the court subject to appeal.

The bankruptcy court shall send a notice to the firm case of the debtor concerning decision on Art. 630; Art. 707, Par. 1; Art. 710, 735, 744 and 755 on the same day the decision has been taken.

(1)

(Supplemented, SG 84/2000/) Upon institution of bankruptcy proceedings or in the cases under art. 629a the debtor shall continue his activities under the supervision of the assignee in bankruptcy. He may conclude new transactions with preliminary approval of the assignee in bankruptcy only, and in compliance with the measures, determined by the ruling on institution of bankruptcy proceedings.

(2)

The court may deprive the debtor of the right to manage and dispose of his assets and to grant this right to the receiver in bankruptcy, should it establish that by his actions the debtor jeopardises the interests of creditors.

(1)

The performance of obligations to the debtor shall be taken over by the receiver in bankruptcy as from the date of promulgation of the ruling on institution of bankruptcy proceedings.

(2)

(New - SG 70/1998) The performance of an obligation made to the debtor after the date of the ruling on institution of bankruptcy proceedings, but before the promulgation thereof, shall be deemed valid, should the performer does not know about the institution of bankruptcy proceedings or even he knows in case the contribution is included in the bankruptcy estate. The good faith shall be presumed up to the establishment of the contrary one

(1)

(Supplemented, SG 84/2000/) Upon institution of bankruptcy proceedings, court and arbitration proceedings under civil and commercial cases against the debtor shall be suspended. This shall not apply if, by the date of opening the bankruptcy proceedings  on other case on which the debtor is a defendant, the court has admitted for joint consideration counter claim of the debtor or his objection for deduction.

(2)

(Amended - SG 70/1998) Suspended proceedings shall be terminated, provided the receivable is accepted upon the terms of the Article 693, paragraph1, item1.

(3)

(New - SG 70/1998) The proceedings suspended by virtue of the paragrahp 1 shall be renewed and continued by the participation of:

1.

the receiver and the creditor, provided the receivables are not included within the list of the receivables accepted by the receiver or within the list approved by the court under Article 692;

2.

the receiver, the creditor and the person, which has raised an objection, in case the receivables are included in the list of the receivables accepted by the receiver and in respect of which an objection is raised under the procedure of Article 692 paragraph 2.

(4)

(New - SG 70/1998) The ruling under paragraph 3 shall have constitutive effect in respect to the relationships among the debtor, the receiver and all creditors in the bankruptcy.

(1)

Upon institution of bankruptcy proceedings any execution proceedings against assets included in the bankruptcy estate shall be suspended.

(2)

Where within the period as from the suspension pursuant to paragraph 1 through the date of promulgation of the ruling on institution of bankruptcy proceedings payments have been effected to claimants, the moneys paid shall be returned to the bankruptcy estate.

(3)

(Amended - SG 70/1998, SG 103/1999) Where actions have been undertaken in favour of secured creditors for realisation of the security, the court may allow the proceedings to continue should a danger of jeopardising the creditor's interests exists. The amount received, which exceeds the amount of the security shall be included in the bankruptcy estate except for the properties pursuant to Article 159, Paragraph 1 of the Tax Procedure Code.

(1)

Creditors of receivables that have occurred after the date of the ruling on institution of bankruptcy proceedings shall receive payment on maturity, and where they have not received payment on maturity or prior to the date of the ruling declaring the debtor bankrupt they shall be satisfied pursuant to the procedure under Article 722, paragraph 1.

(2)

Creditors pursuant to paragraph 1 may obtain security for their receivables from the bankruptcy estate.

(1)

(Previous Art. 640 - Amended - SG 84/2000) Debtors shall be obliged to provide within 14 days from the opening of the bankruptcy proceedings:

1.

adequate information related to the activities of their enterprises and their properties;

2.

(Amended - SG 90/1999) list of payments in cash or by means of bank transfer, that exceed 1200 BGN and that have been effected within three months prior to the initial date of insolvency;

3.

list of payments effected by the debtor to persons related thereto, for a period of one year prior to the initial date of insolvency.

(2)

(New - SG 84/2000) If the debtor does not implement his obligation under Par. 1, the court shall impose the offensive person  a fine from 500 to 1000 BGN.

(Amended - SG 84/2000) The repeal of the ruling on institution of bankruptcy proceedings shall remove imposed prohibition and constraints, restore the authority of the debtor and terminate the authority of the receiver in bankruptcy from the moment of entry of the decision of the court of appeal or of the Supreme Court of cassation in the respective register.

Upon request of the receiver in bankruptcy, the debtor or any creditor, the court may allow measures provided by law, securing the available assets of the debtor.

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