On Rehabilitation and Bankruptcy

On Rehabilitation and Bankruptcy

Unofficial translation

The Law of the Republic of Kazakhstan dated 7 March 2014 No. 176-V.

Unofficial translation

      Footnote. Throughout the text:
      the word “(assets)” is excluded;
      the words “Insolvency settlement procedure”, “on the insolvency settlement”, “insolvency settlement procedures” are replaced by the words “Debt restructuring procedure”, “on debt restructuring”, “debt restructuring procedures”, respectively;
      the words “credits (loans)”, “credits”, “credit” are replaced by the words “loans”, “loans”, “loan”, respectively, in accordance with Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

This Law governs public relations arising in case of a debtor’s failure to satisfy creditors’ claims in full, establishes the grounds for applying the debt restructuring procedure, rehabilitation procedure and declaring the debtor bankrupt, liquidating the debtor without initiating the bankruptcy procedure, and also determines the procedure and conditions for their implementation.

Footnote. The preamble of Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Chapter 1. GENERAL PROVISIONS

Article 1. Basic concepts used in this Law

The following basic concepts are used in this Law:

1) agricultural producer - an individual entrepreneur or legal entity producing agricultural products using land; producing agricultural products of animal, poultry husbandry (including those of full-cycle breeding that starts with rearing young animals), products of beekeeping, if income from the sale of these products, including processed ones, is over fifty percent of total annual income;

2) premeditated bankruptcy - actions of a founder (participant), an official, as well as an individual entrepreneur, committed for own benefit or in the interests of other persons in order to avoid obligations to creditors by alienating or concealing property during three years before the declaration of a legal entity or individual entrepreneur bankrupt;

3) administrator – an interim administrator, rehabilitation, interim and bankruptcy managers exercising powers during legal proceedings in accordance with this Law, as well as during a rehabilitation procedure and bankruptcy procedure;

4) administrative expenses - expenses related to the initiation and conduct of a rehabilitation procedure or bankruptcy procedure;

5) bankrupt - a debtor whose insolvency is declared by a final and binding court judgment;

6) bankruptcy - insolvency of a debtor recognized by a court judgment and being a ground for its liquidation;

7) bankruptcy procedure - a procedure carried out in order to satisfy creditors’ claims using the bankrupt’s property mass in the manner prescribed by the laws of the Republic of Kazakhstan;

8) bankruptcy manager - a person appointed to carry out a bankruptcy procedure by the authorized body for rehabilitation and bankruptcy;

9) debtor - an individual registered as an individual entrepreneur (an individual entrepreneur), or a legal entity, which is subject or was subjected to the procedure on the grounds provided for by this Law;

Note of the ILLI!
Subparagraph 10) is meant to be amended by Law № 342-V of the Republic of Kazakhstan as of 02.08.2015 (shall be enforced from 01.01.2023).

10) group of homogeneous creditors - a group of creditors with identical claims against the debtor that have no advantage over each other in their satisfaction.

Groups of homogeneous creditors can consist of :

creditors for claims of compensation for damage to life or health;

creditors for wages and payment of compensations under labor contracts, as well as arrears in social contributions to the State Social Insurance Fund, in mandatory pension contributions, mandatory professional pension contributions, in deductions and (or) contributions for mandatory social health insurance;

creditors for secured obligations;

creditors for taxes and customs payments;

creditors for claims arising from contracts for the supply of goods, works and services;

creditors - financial institutions (microfinance organizations) for claims arising from loan (microcredit) contracts not secured by a pledge;

creditors - holders of the debtor’s bonds;

11) a single production complex - property, which, in the aggregate, ensures a single cycle of the production, procurement, storage, transportation, processing or sale of agricultural products;

12) amicable agreement - a procedure applied at any stage of the bankruptcy procedure in order to terminate it by concluding an agreement between the bankrupt and creditors, which is approved by court;

13) absent debtor - a debtor recognized as inactive in accordance with the Code of the Republic of Kazakhstan “On Taxes and Other Mandatory Payments to the Budget” (Tax Code), the absence of which, and also of its founder (participant), official, is established in the manner determined by this Law;

14) ordinary commercial transactions - actions related to the debtor’s ordinary operations, which are of a regular nature, including but not limited to making payments for the rent of premises and utilities, transactions with suppliers, purchasing raw materials, equipment maintenance, selling finished products and rendering services.

Ordinary commercial transactions do cot include deals related to the alienation of real estate or other assets, the pledging of property, also for the obligations of third parties;

15) secured creditor - a creditor for obligations, whose claims are secured by the debtor’s property;

Note of the ILLI!
Subparagraph 16) is meant to be amended by Law№ 342-V of the Republic of Kazakhstan as of 02.08.2015 (shall be enforced from 01.01.2023).

16) creditor - a person having property claims against the debtor, which arise from the debtor’s civil and (or) other obligations, including those for the payment of wages, payment of royalties, compensation under labor contracts, payment of arrears in social contributions to the State Social Insurance Fund, mandatory pension contributions, mandatory professional pension contributions, deductions and (or) contributions for mandatory social health insurance, taxes, customs payments, special, anti-dumping, countervailing duties, interest, and other mandatory payments to the budget;

17) the creditors’ committee - a representative body of creditors elected by the creditors’ meeting in the course of rehabilitation and bankruptcy procedures and having the powers provided for by this Law;

18) register of creditors’ claims - a list of creditors’ claims against the debtor indicating their size, grounds and date of occurrence, which is formed in the course of rehabilitation or bankruptcy procedures in the manner prescribed by this Law;

19) town-forming legal entity - a legal entity assigned in accordance with the rules approved by the authorized body for regional development;

20) official - a member of the board of directors of a joint-stock company, the head (deputy head) of a legal entity - a debtor, as well as another person, who is a member of the collegial executive body of a legal entity, endowed with permanent or temporary powers to manage a legal entity, a chief accountant of a legal entity - a debtor , as well as another person temporarily performing his/her duties;

21) property mass - the property of the bankrupt, which can be foreclosed on in the course of the bankruptcy procedure, as well as the property of other persons in the cases provided for by this Law;

22) the authorized body for rehabilitation and bankruptcy (hereinafter referred to as the authorized body) - a state body in charge of state regulation in the field of rehabilitation and bankruptcy (except for state-owned enterprises, institutions, banks, insurance (reinsurance) companies and accumulative pension funds);

23) rehabilitation manager - a person entrusted with the authority to manage the debtor during the rehabilitation procedure in the manner prescribed by this Law;

24) rehabilitation plan - a set of interrelated measures aimed at improving the debtor through the rehabilitation procedure and carried out on the basis of mutual consent of the debtor and creditors, in order to restore the debtor’s solvency and preserve jobs, indicating the time frame for implementation, including the schedule for satisfying creditors’ claims, as well as results achieved, resources used and possible risks;

25) rehabilitation procedure - a judicial procedure under which the debtor is subject to reorganization, organizational and economic, managerial, investment, technical, financial and economic, legal and other measures not inconsistent with the legislation of the Republic of Kazakhstan aimed at restoring solvency;

26) reverse factoring - a tripartite agreement concluded by the debtor (bankrupt), his/her/its debtor and third party, where the debtor transfers his/her/its obligation to the debtor (bankrupt) to the third party, and the latter fulfills the debtor’s obligations to the debtor (bankrupt);

27) creditor for taxes and customs payments - a person having claims against the debtor, which arise from the debtor’s obligations to pay taxes, customs payments, special, anti-dumping, countervailing duties, interest, as well as other mandatory payments to the budget;

28) reorganization - an event provided for by the rehabilitation plan, during which the owner of the property of a debtor (a body authorized by him/her/it), creditors or other persons provide the debtor with financial assistance, and also implements another set of measures to mobilize the debtor’s reserves and improve his/her/its financial and economic situation;

29) interim administrator - a person who entered into an agreement on drawing up a register of creditors’ claims and making an opinion on the debtor’s financial stability during rehabilitation proceedings;

30) interim manager - a person who entered into an agreement on drawing up a register of creditors’ claims and making an opinion on the debtor’s financial stability during bankruptcy proceedings, and also on conducting bankruptcy procedure before the appointment of a bankruptcy manager, or appointed thereto by the authorized body in cases established by this Law;

31) affiliated persons - individuals or legal entities (except for state bodies exercising control and supervisory functions within their powers, the national managing holding, the Housing Construction Guarantee Fund), who can directly and (or) indirectly shape decisions and (or) influence decisions made by a participant in the rehabilitation or bankruptcy procedure, also by virtue of the concluded agreement (the list of affiliated persons in the rehabilitation or bankruptcy procedure is established by Article 9 of this Law);

32) factoring - a tripartite agreement concluded by the debtor (bankrupt), his/her/its debtor and third party, where the debtor (bankrupt) assigns or undertakes to assign a property claim to his/her/its debtor to the third party, and the latter transfers or undertakes to transfer money or other property in the disposition of the debtor (bankrupt) in exchange for the right to claim against the debtor of the debtor (bankrupt).

Footnote. Article 1 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 2. Legislation of the Republic of Kazakhstan on rehabilitation and bankruptcy

Legislation of the Republic of Kazakhstan on rehabilitation and bankruptcy is based on the Constitution of the Republic of Kazakhstan and consists of this Law and other regulatory legal acts of the Republic of Kazakhstan.
If international treaty ratified by the Republic of Kazakhstan establishes other rules than those provided by this Law, the rules of international law shall be applied.

Article 3. Special aspects of applying this Law

This Law applies to cases of debt restructuring, rehabilitation and bankruptcy of individual entrepreneurs and legal entities, as well as their liquidation without initiating the bankruptcy procedure, except for state-owned enterprises and institutions, accumulative pension funds, banks, insurance (reinsurance) companies.

In case of adoption of decision by the court on declaration of a bank, insurance (reinsurance) organization, pension saving fund as a bankrupt, their liquidation shall be carried out in accordance with the bank legislation of the Republic of Kazakhstan, legislation of the Republic of Kazakhstan on insurance and insurance activity, as well as pension benefits.

Peculiarities of applying bankruptcy or rehabilitation proceedings with respect to cotton processing organizations, grain receiving enterprises, as well as natural monopoly entities can be determined by the legislation of the Republic of Kazakhstan.

Cases of debt restructuring, rehabilitation, bankruptcy of individual entrepreneurs and legal entities, as well as their liquidation without initiating the bankruptcy procedure, are considered by court in accordance with general rules for civil proceedings with account of special provisions established by this Law.
In case of bankruptcy of organizations and individual entrepreneurs that are natural monopoly entities or are of great strategic importance for the economy of the Republic of Kazakhstan, that can influence the life, health of citizens, national security or the environment, including organizations, whose blocks of shares (participatory interests in the authorized capital) are classified as strategic objects in accordance with the legislation of the Republic of Kazakhstan, and also those declared bankrupt on the initiative of the state, in order to protect the interests of citizens and the state the Government of the Republic of Kazakhstan, has the right to establish special conditions and procedure for the sale of property mass and additional requirements for purchasers of property mass, and also to make a decision on the acquisition of the property mass by the national managing holding in the event of bankruptcy of organizations, whose blocks of shares (participatory interests in the authorized capital) are classified as strategic objects in accordance with the legislation of the Republic of Kazakhstan, or organizations of great strategic importance for the economy of the Republic of Kazakhstan.
Upon bankruptcy of legal entities carrying out environment hazardous types of economic and other activity, the compulsory environmental audit of their activity shall be conducted in accordance with the Environmental Code of the Republic of Kazakhstan.

Footnote. Article 3 as amended by the Law of the Republic of Kazakhstan dated 28.12.2016 № 34-VI (shall be enforced from 01.01.2017); № 290-VI as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 4. Declaration of bankruptcy

Bankruptcy shall be established on a voluntary basis on the basis of application of the debtor to the court.
Bankruptcy shall be established compulsorily on the basis of application to the court of the creditors or other persons authorized by this Law.
In cases established by this Law, the debtor shall be obliged to refer to the court with the application on declaring it as bankrupt.
If the value of the property of a legal person, to be liquidated in accordance with a decision made under paragraph 1 of article 49 of the Civil Code of the Republic of Kazakhstan, is not sufficient to satisfy creditors’ claims, a liquidation commission shall petition the court for declaring this legal person bankrupt in order to conduct bankruptcy proceedings according to the rules established by this Law.
The ground for declaring the debtor as bankrupt in a judicial proceeding is its insolvency.

The debtor’s insolvency is established by court with account of an opinion on financial stability drawn up in accordance with Article 49 of this Law.

Footnote. Article 4 as amended by the Law of the Republic of Kazakhstan dated 13.11.2015 № 399-V (shall be enforced upon expiry of ten calendar days after the day its first official publication); № 290-VI as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 5. Grounds for filing a bankruptcy petition and an application to liquidate a debtor with the initiation of the bankruptcy procedure with court

A ground for a debtor to file a bankruptcy petition and an application for its liquidation with the initiation of the bankruptcy procedure with court is his/her/its persistent insolvency.

Insolvency is persistent if the debtor’s obligations exceed the value of his/her/its property as at the date of filing an application with the court and as at the beginning of the year in which the application is filed, and also as at the beginning of the year preceding the year of filing the application, in case it was filed by the debtor in the first quarter of a calendar year.

A ground for a creditor to file an application for declaring the debtor bankrupt and liquidating it with the initiation of the bankruptcy procedure with court is the debtor’s outstanding financial obligation to the creditor pursuant to a final and binding judicial act or a writ of execution on the collection of money from the debtor or recognition of the debt by the debtor, unless otherwise is provided for by this paragraph.

A ground for a creditor for taxes and customs payments to file an application for declaring the debtor bankrupt and liquidating it with the initiation of the bankruptcy procedure with court is the debtor’s failure to pay tax debts, as well as arrears in customs payments, special, anti-dumping, countervailing duties, interest after taking all enforced collection measures in the manner prescribed by the tax and customs legislation of the Republic of Kazakhstan.

Footnote. Article 5 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 5-1. Grounds for filing an application for the rehabilitation procedure and debt restructuring procedure with court

A ground for a debtor or creditor to file an application for the rehabilitation procedure with court is the debtor’s temporary insolvency.

Insolvency is temporary in case of one or more circumstances being in place as of the date of filing the application:

Note of the ILLI!
Subparagraph 1) is meant to be amended by Law № 342-V of the Republic of Kazakhstan as of 02.08.2015 (shall be enforced from 01.01.2023).

1) obligations to creditors for claims of compensation for damage to life and health, recovery of alimony, obligations for wages, payment of compensation under labor contracts, payment of arrears in social contributions to the State Social Insurance Fund, mandatory pension contributions and mandatory professional pension contributions, deductions and (or) contributions for mandatory social health insurance, as well as remuneration to authors for an employee invention, utility model, industrial design were not fulfilled within three months of their due date;

2) obligations to other creditors were not fulfilled within four months of their due date.

A ground for a debtor to file an application for the debt restructuring procedure with court is his/her/its temporary insolvency.

Footnote. Chapter 1 is supplemented with Article 5-1 in accordance with Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 6. Liability for premeditated bankruptcy

A founder (participant) and (or) an official found guilty of premeditated bankruptcy in the course of administrative or criminal proceedings shall bear subsidiary liability to creditors with the property belonging to them in the amount determined in accordance with paragraph 3 of Article 96 of this Law.

If two or more persons are found guilty of premeditated bankruptcy in the course of administrative or criminal proceedings, such persons shall be jointly liable.

A bankruptcy manager, within ten working days of entry into force of a judicial act on bringing a founder (participant) and (or) an official to criminal or administrative liability, shall file a lawsuit against such a person to bring him/her to subsidiary liability and recover the amount determined in accordance with paragraph 3 of Article 96 of this Law.

A creditor also has the right to file a lawsuit in accordance with the procedure provided for in this article, if a founder (participant) and (or) an official are found guilty of premeditated bankruptcy in the course of administrative or criminal proceedings after the completion of the bankruptcy procedure.

Footnote. Article 6 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 7. Invalidation of the debtor’s transactions and return of property

Transactions are invalidated if they were made by a debtor or a person authorized by him/her/it within three years prior to the initiation of rehabilitation and (or) bankruptcy proceedings, unless otherwise provided for by this Law, given grounds provided for by the civil legislation of the Republic of Kazakhstan and this Law.

If the bankruptcy procedure was applied to a debtor as a result of termination of the rehabilitation procedure, the time period specified in part one of this paragraph shall be calculated from the date of entry into force of a court judgment on the application of the rehabilitation procedure.

Grounds for invaliding transactions, except for those provided for by the Civil Code of the Republic of Kazakhstan, are as follows:

1) the price of the transaction made and (or) other conditions differ significantly for the worse for the debtor from the price and (or) other conditions under which similar transactions are made in comparable circumstances;

2) the transaction is out of scope of the debtor’s activities, which are limited by the laws of the Republic of Kazakhstan, constituent documents, or was made in violation of the competence determined by the charter;

3) the property was transferred (also into temporary use) free of charge or at a price that significantly differs for the worse for the debtor from the price of an identical or similar product under comparable economic conditions or without grounds for transfer to the detriment of creditors’ interests;

4) if the transaction, completed within six months prior to the initiation of the rehabilitation and (or) bankruptcy proceedings, resulted in preferential satisfaction of claims of some creditors over others;

5) gift contracts for the debtor’s property, if such a transaction differs significantly from those concluded a year before the initiation of a rehabilitation or bankruptcy proceeding;

6) the transaction made without the intention to create appropriate legal consequences for such a transaction, to the detriment of creditors’ interests.

In case of revealing transactions made under the circumstances specified in paragraphs 1 and 2 of this article, the administrator is obliged, also at the request of the creditor who identified the transaction, within ten working days of identification, file an application for invalidating such transactions with court.
If the transaction is recognized as invalid, the defendant is obliged to return everything received under the transaction, if it is impossible to return in kind - to reimburse the cost of the property subject to return, the cost of using the property, works performed or services rendered in money, unless other consequences of the transaction’s invalidation are provided for by the Civil Code of the Republic of Kazakhstan.

In this case, the defendant gets the right to claim against the debtor, which is subject to satisfaction in accordance with paragraph 5 of Article 100 of this Law.

If it is impossible to return the property in the cases indicated in this article, or in case of gratuitous transfer of property in connection with its loss, damage or its subsequent acquisition by third parties in good faith, original purchasers of the claimed property shall be liable to the debtor for compensation of losses incurred in connection therewith to the extent of the value of property lost, damaged or acquired by third parties in good faith.
If it is impossible to reimburse the value of the property by the original purchaser, the person who made the decision to alienate the debtor’s property shall be brought to subsidiary liability in court.
The requirements of this article do not apply to transactions:

1) of project financing, securitization;

2) concluded in the stock exchange trading system by open bidding;

3) committed by the debtor as part of ordinary commercial transactions, the conditions of which do not significantly differ from those of similar transactions entered into by the debtor in the course of his/her/its entrepreneurial activity within three years prior to the initiation of a rehabilitation and (or) bankruptcy proceeding.

Footnote. Article 7 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 8. Legal regime of contracts

Initiation of bankruptcy case is not the ground for unilateral refusal from fulfillment of the contract concluded by the debtor until initiation of bankruptcy case, at the initiative of the contracting party of the debtor and shall not entail termination of validity of this contract. Agreement of parties concluded before initiation of bankruptcy case on refusal from fulfillment of the contract and on termination of validity of the contract by the reason of initiation of a bankruptcy case shall be invalid.
Rehabilitation manager shall have the right to refuse from fulfillment of contracts concluded by the debtor before initiation of case of rehabilitation, not fulfilled by both parties in full or in part, in existence of one of the following circumstances:

1) contract is concluded with the affiliated person;2) contract contains exacting terms for the debtor in comparison with previously concluded analogous contracts;

3) contract is long-termed (more than one year) or estimated for receipt of the results by the debtor only for long-term perspective;

4) there are other grounds to suppose than the fulfillment of the contract by the debtor entails unfavorable consequences for the rest creditors.

Bankrupt manager shall be obliged to change, dissolve, refuse from fulfillment or contest force of the contract concluded before initiation of bankruptcy case, require return of property transferred by the debtor on the basis of decision of the creditors’ commission.
The offset of mutual claims between the debtor and his/her/its creditors is not allowed from the date of issuance of a court ruling to initiate a rehabilitation or bankruptcy proceeding and until the entry into force of a court ruling to terminate the rehabilitation or bankruptcy proceeding or a court judgment to apply the rehabilitation procedure to the debtor or declare the debtor bankrupt.

Rehabilitation or bankrupt manager shall be obliged to declare on offset of requirements to the creditor, if the offset of requirements do not violate the order of priority of satisfying the requirements of creditors, is direct, mutual and without involvement of other persons. Offset shall be allowed only upon requirements on paying money.

Supplier of electrical and heating energy, services on hydroeconomic and sewage systems, communication, as well as on protection of property of the debtor shall not have the right to refuse from the contract concluded with the debtor by the reason of declaration of the debtor as bankrupt. Costs linked with fulfillment of such contracts after initiation of the case on rehabilitation or bankruptcy shall relate to administrative costs.

Footnote. Article 8 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 9. Affiliated persons

According to this Law, the affiliated persons are:

1) shareholder, founder (participant), debtor or creditor;

2) close relatives, husband (wife), close relatives of husband (wife) o individual entrepreneur-debtor, as well as individual mentioned in subparagraphs 1), 3) and 4) of this Article;

3) person linked with participant of the procedures of rehabilitation and bankrupt by the contract in accordance with which it shall have the right to determine decisions adopted by the debtor;

4) civil servants of participant of the procedures of rehabilitation and bankrupt or legal entity mentioned in subparagraph 1), 3), 5), 6) and 7) of this Article;

5) legal entity in respect of which, the participant of procedures of rehabilitation and bankruptcy is the shareholder, participant or has the right to the relevant share in property;

6) legal entity that jointly with participant of the procedures of rehabilitation and bankruptcy is under control of the third party;

7) another person who is an affiliated person of a participant in rehabilitation and bankruptcy procedures in accordance with the legislative acts of the Republic of Kazakhstan or recognized as affiliated by a court judgment.

Footnote. Article 9 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 10. Confidentiality

The authorized body and the administrator have the right to request and receive information on the debtor’s financial and economic activities, also during the period before he/she/it was declared bankrupt, without obtaining the consent of the individual entrepreneur, the owner of the property (a body authorized by him/her/it), founders (participants in) of the bankrupt.
Disclosure of information on financial and economic activities by the administrator or an official of the authorized body to whom it is entrusted or known in the line of duty or through work, as well as the loss of documents containing such information, shall entail liability established by the laws of the Republic of Kazakhstan. This article also applies to persons involved by the administrator.
Transfer of information by the authorized body or administrator provided to them to the state bodies in cases provided by the Laws of the Republic of Kazakhstan is not divulgence of confidential information.
Upon conduct of procedures provided by this Law, the following information is not confidential:

1) about person appointed by the administrator;

2) about composition of the creditors’ commission and decisions adopted by them;

3) about a sum of requirements included into the register of requirements of the creditors and about amount of their satisfying in the context of priorities;

4) about terms of conducting procedures;

5) about execution of the schedule of redemption of debts before the creditors;

6) about existence of complaints against the action (omission) of the administrator and results of their consideration;

7) about bringing of the administrator to the responsibility according to the facts of detected infractions;

8) about grounds for termination of rehabilitation procedure;

9) provided by the administrator to the creditors’ commission for adoption of decision;

10) about judicial proceedings initiated by the authorized persons within realization of rights established by this Law.

Footnote. Article 10 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 11. Legal status of the debtor

The debtor has the right to:

1) file a bankruptcy petition, apply to court for the debt restructuring procedure, rehabilitation procedure, liquidation without initiating the bankruptcy procedure in the cases provided for by this Law;

2) conclude an amicable agreement during the bankruptcy procedure in the manner and on the terms provided for by this Law;

3) dispute the amounts of accounts payable in court, and also involve audit organizations for these purposes;

4) enjoy other rights provided for by the legislation of the Republic of Kazakhstan.

The debtor is obliged:

1) to file a bankruptcy petition in the event that the owner of his/her/its property (a body authorized by him/her/it), the body of a legal entity authorized by the constituent documents made a decision to liquidate it, and the value of the property is insufficient to satisfy creditors’ claims in full;

2) to provide the court and the administrator, within three working days of the latter’s appointment, with information on financial and economic activities, including that on the debtor’s property, including encumbered property, which is in property rent and (or) lease, on money in bank accounts, account numbers and location of banks, organizations carrying out certain types of banking operations, on the amount of accounts receivable;

3) before filing an application for the rehabilitation procedure with court, to conclude an agreement on the exercise of powers of an interim administrator with a person whose notification is included in the register of notifications of persons entitled to carry out the activities of an administrator;

4) before filing a bankruptcy petition, to conclude an agreement on the exercise of the powers of an interim manager with a person whose notification is included in the register of notifications of persons entitled to carry out the activities of an administrator;

5) to submit the documents specified in paragraph 2 of Article 115 of this Law to the authorized body, within three working days of the court judgment on liquidating the debtor without initiating the bankruptcy procedure;

6) to transfer to the rehabilitation manager, within three working days of his/her appointment, constituent documents, seals (if any), stamps, within fifteen working days - accounting documentation, within two months - material and other valuables;

7) to transfer to the interim manager constituent documents, seals (if any), stamps within three working days of the court judgment on declaring the debtor bankrupt, within ten working days - accounting documentation, documents of title to the bankrupt’s property, within twenty working days - material and other valuables belonging to the bankrupt;

8) to provide the interim manager with access to the accounting documentation for study by viewing;

9) to provide the interim administrator with access to the accounting documentation for study by viewing;

10) to ensure the completeness and reliability of accounting documents, accounting systems and financial reporting;

11) in the course of the rehabilitation procedure, to provide information on the progress of his/her/its activities to any creditor pursuant to a written request, within three working days of its receipt, except for confidential information;

12) on the basis of a request, to provide information on, explanations about the financial situation and economic activities of the debtor to the court, rehabilitation, interim or bankruptcy manager and the creditors’ committee;

13) on or before the 15th day of each month, to bring to the attention of the creditors’ committee information on the financial condition, transactions made in the course of ordinary commercial transactions over a previous month during the period of the rehabilitation procedure;

14) to fulfill other obligations provided for by this Law.

In cases where the management of the debtor in the rehabilitation procedure is entrusted to an individual entrepreneur - a debtor or a body or person authorized by the owner of property, founder (participant in) of a legal entity - a debtor, the latter exercises powers within the competence and responsibility established by the legislation of the Republic of Kazakhstan, provided for by this Law for a rehabilitation manager.
For violating the provisions of subparagraphs 1), 2), 7) and 8) of paragraph 2 of this article, if the debtor’s property is insufficient to satisfy the creditors’ claims in full, an official, whose duties include fulfilling the requirements specified in subparagraphs 1), 2), 7) and 8) of paragraph 2 of this article, bears subsidiary liability in accordance with the laws of the Republic of Kazakhstan to the extent of the bankrupt’s obligations to creditors that remained unfulfilled as a result of the bankruptcy procedure.

Footnote. Article 11 is amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 12. An administrator

The following persons, who submitted a notification of the commencement of the administrator’s activity to the authorized body in the manner prescribed by this Law, may act as an administrator:

1) an individual who meets the requirements established by paragraph 2 of this article;

2) a professional accountant.

The powers assigned by this Law to the administrator cannot be transferred to other persons, except for the cases provided for in paragraph 2 of Article 78 and Article 118-1 of this Law, as well as the Law of the Republic of Kazakhstan “On Equity Participation in Housing Construction”.

Requirements for the persons, specified in subparagraph 1) of paragraph 1 of this article, for carrying out activities as an administrator are as follows:

1) higher education in the field of law, economics and business;

2) work experience of at least three consecutive years in the legal, economic, accounting, financial, auditing or control and auditing areas;

3) the person shall not be obliged to have regular medical check-ups at a drug abuse or psychiatric clinic;

4) the person shall have no unspent or unexpunged conviction;

5) the person shall not be recognized incapable or partially incapable by court.

The basis for entering the applicant’s notification into the register of notifications of persons entitled to carry out the activities of an administrator is the applicant’s submission of a notification of the commencement of activities to the authorized body through the state information system of permits and notifications.

The notification shall be submitted together with:

1) the Commission’s decision on successful qualification exam of a person claiming the right to carry out the activities of an administrator - if the applicant is the person specified in subparagraph 1) of paragraph 1 of this article.

The Commission’s decision on successful qualification exam of a person claiming the right to carry out the activities of an administrator is valid during one year of such an exam;

2) a professional accountant certificate - if the applicant is a person specified in subparagraph 2) of paragraph 1 of this article.

When changing the data specified by the applicant in the notification, the applicant shall, within ten working days of the change in the data, send a notification thereof to the authorized body.

Upon termination of his/her activities, the administrator is obliged to send a relevant notification to the authorized body.

If the administrator participates in the capacity of a rehabilitation and (or) bankruptcy manager, a notification of voluntary termination of activities shall be submitted together with a copy of the minutes of the creditors’ meeting on the selection of a new candidate for rehabilitation and (or) bankruptcy managers in respect of each debtor.

An affiliate cannot be appointed as an administrator.

A person, who exercised the authority to manage the debtor in the course of the rehabilitation procedure, which was terminated on the grounds provided for in subparagraph 2) of paragraph 1 and subparagraph 3) of paragraph 3 of Article 82 of this Law, cannot be appointed to exercise the authority to manage the debtor under the rehabilitation procedure within two years of entry into force of a court ruling on the termination of the rehabilitation procedure.

A person removed from the register of notifications of persons entitled to carry out the activities of an administrator on the grounds provided for in subparagraphs 3), 4) and 6) of paragraph 8 of this article cannot be an administrator if less than three years have passed since the date of removal.

For the period of the rehabilitation procedure and the bankruptcy procedure, all bodies of the debtor are suspended from management and the sole governing body of the debtor is:

a rehabilitation manager (in case of his/her appointment under the rehabilitation procedure) or a reorganization participant - from the date of entry into force of a court ruling on the approval of a rehabilitation plan;

an interim manager - from the date of entry into force of a court judgment on declaring the debtor bankrupt until the appointment of a bankruptcy manager;

a bankruptcy manager - from the date of his/her appointment.

Rehabilitation and bankruptcy managers, reorganization participant are obliged to exercise their powers at the location of the debtor.

The provisions of part one of this paragraph shall not apply in the case specified in subparagraph 1) of paragraph 1 of Article 69 of this Law.

The authorized body shall dismiss a rehabilitation or bankruptcy manager from performing his/her powers in relation to a certain debtor in cases of:

1) his/her refusal to exercise his/her powers in accordance with part one of paragraph 5 of this article;

2) the decision of the creditors’ meeting to dismiss him/her;

3) revealing, as a result of inspection, violations of the requirements established by this Law and other laws of the Republic of Kazakhstan;

4) sending him/her the notification specified in paragraph 7 of Article 18 of this Law more than thrice within twelve consecutive calendar months.

The dismissal of the rehabilitation or bankruptcy manager in accordance with the provisions of this paragraph does not entail his/her suspension from exercising the powers of an administrator in relation to other debtors and does not prevent him/her from being vested with the powers of an administrator in relation to other debtors.

The authorized body shall remove the administrator’s notification from the register of notifications of persons entitled to carry out the activities of an administrator in cases of:

1) an applicant’s failure to submit the documents specified in part two of paragraph 3 of this article;

2) refusal to exercise the powers of the administrator more than twice within twelve consecutive calendar months, except for refusal to fulfill the powers in accordance with part one of paragraph 5 of this article;

3) a failure of the administrator to inform on circumstances that prevented his/her appointment as a rehabilitation or bankruptcy manager in accordance with part one of paragraph 5 of this article, if they are revealed by the authorized body during the rehabilitation procedure or bankruptcy procedure;

4) violation of the requirements of this Law, which hurt interests of a creditor or a debtor, the fact which was established by a final and binding judicial act;

5) a failure to submit documents confirming professional development;

6) termination of a criminal case or exemption from criminal liability for committing criminal offenses in the field of economic activity, as well as committing corruption and other criminal offenses against the interests of the public service and public administration on the grounds specified in paragraphs 3), 4), 9) and 12) of part one of Article 35 or part one of Article 36 of the Criminal Procedure Code of the Republic of Kazakhstan;

7) entry into force of a judgment of conviction against this person;

8) his/her obligation to have regular medical check-ups at a drug abuse or psychiatric clinic;

9) recognition as incapable or partially incapacitated by court;

10) the administrator’s submission of a notification of termination of his/her activity;

11) death or declaration as deceased or recognition as missing by court.

A notification is removed from the register of notifications of persons entitled to carry out the activities of an administrator by the authorized body within the following time frames:

1) in the case specified in subparagraph 1) of paragraph 8 of this article - within one working day of discovery;

2) in the cases specified in subparagraphs 2), 3), 4), 6), 7), 8), 9), 10) and 11) of paragraph 8 of this article - within five working days of discovery;

3) in the case specified in subparagraph 5) of paragraph 8 of this article - within twenty working days of the beginning of a year following the year of expiration of the deadline for advanced training.

The authorized body, within three working days of the notification’s removal from the register of notifications of persons entitled to carry out the activities of an administrator, sends information on the removal of a rehabilitation or bankruptcy manager from such a register to the creditors’ meeting.
In the event of dismissal of a rehabilitation or bankruptcy manager from the performance of the assigned powers or removal of his/her notification from the register of notifications of persons entitled to carry out the activities of an administrator, the powers provided for by this Law shall continue to be exercised by a newly appointed rehabilitation or bankruptcy manager.
The administrator is obliged to improve his/her qualification in the manner determined by the authorized body.

Supporting documents on advanced training are submitted once every three years. The calculation of the term begins from a year following the year of the notification’s entry into the register of notifications of persons entitled to carry out the activities of an administrator.

The documents specified in this paragraph shall be submitted by the end of the year in which the advanced training was completed.

The administrator has the right to interact with the authorized body and other persons electronically in the manner determined by the authorized body.

Footnote. Article 12 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 13. Remuneration of an administrator

The basic remuneration of an interim administrator and interim manager shall be paid at the expense of the debtor or creditor who filed an application for the rehabilitation procedure or a bankruptcy petition with court

The amount of the basic remuneration is determined by an agreement on the exercise of the powers of an interim administrator or interim manager, concluded between the debtor or creditor and the person entitled to carry out the activities of the administrator, and cannot be lower than the minimum limit established by the authorized body.

The agreement specified in part two of this paragraph is concluded prior to filing an application for the rehabilitation procedure or a bankruptcy petition with court and becomes effective on the date of a court ruling on the initiation of a rehabilitation or bankruptcy proceeding.

The debtor or creditor has the right to set the amount of the basic remuneration of the interim administrator or interim manager above the minimum limit established by the authorized body.

The creditor who paid the basic remuneration to the interim administrator or interim manager shall be refunded the amount paid at the expense of the debtor’s property in the event of application of the rehabilitation procedure or bankruptcy procedure.

If the applicant is a creditor for taxes and customs payments, a state body or a legal entity partially owned by the state, the basic remuneration of the interim manager is paid:

1) in accordance with paragraph 3 of Article 110 of this Law, in the amount of the minimum limit established by the authorized body - if in the course of the bankruptcy procedure the circumstances specified in paragraph 2 of Article 110 of this Law were established in the aggregate;

2) at the expense of the debtor’s property in the amount of the minimum limit established by the authorized body - if in the course of the bankruptcy procedure the circumstances specified in paragraph 2 of Article 110 of this Law were not established in the aggregate.

The minimum and maximum limits of the basic remuneration of a bankruptcy manager shall be established by the authorized body.

The amount of the basic remuneration of the bankruptcy manager is determined by the creditors’ meeting within the limits established by the authorized body.

If a deadline for carrying out the procedure established by paragraph 1 of Article 84 of this Law is missed, the basic remuneration of the bankruptcy manager shall be reduced and paid in the amount of:

seventy five percent of the amount of the basic remuneration established on the basis of the decision of the creditors’ meeting - starting from the month following the month in which the term for conducting the bankruptcy procedure exceeded nine months;

fifty percent of the amount of the basic remuneration established on the basis of the decision of the creditors’ meeting - starting from the month following the month in which the term of the bankruptcy procedure exceeded two years.

The amount of the basic remuneration of the rehabilitation manager is determined by the creditors’ meeting.

The bankruptcy manager shall be paid additional remuneration at the expense of the debtor’s property in case of satisfaction:

1) of less than twenty-five percent of the creditors’ claims included in the register of creditors’ claims - one percent of the amount allocated to satisfy the claims;

2) from twenty-five to fifty percent of the creditors’ claims included in the register of creditors’ claims - two percent of the amount allocated to satisfy the claims;

3) from fifty to seventy-five percent of creditors’ claims included in the register of creditors’ claims - three percent of the amount allocated to satisfy the claims;

4) of more than seventy-five percent of creditors’ claims included in the register of creditors’ claims - four percent of the amount allocated to satisfy the claims.

For the purposes of this paragraphs, the creditors’ claims included in the register of creditors’ claims shall be understood to mean claims of the second, third, fourth and fifth priorities of the register, unless otherwise provided for by part three of this paragraph.

When calculating the additional remuneration of a bankruptcy manager, the amount of claims of secured creditors, satisfied in accordance with Article 104-1 of this Law, is not taken into account, as well as the amounts received into the property mass of the bankrupt as a result of execution of a judicial act on bringing the founder (participant) and (or) an official to subsidiary liability.

Additional remuneration of the bankruptcy manager is payable subject to the satisfaction of claims of the first-priority creditors in full.

The bankruptcy manager is obliged to open a special bank account of the debtor for crediting the amount of additional remuneration.

Money arriving at a special bank account shall be received by a person who carried out the activities of the bankruptcy manager, on the basis of a final and binding court ruling on the completion of the bankruptcy procedure.

The special account shall be closed within three working days of receipt of the money, specified in part two of this paragraph, at the request of the person who carried out the activities of the bankruptcy manager.

The additional remuneration of the rehabilitation manager is subject to payment in the amount determined by the creditors’ meeting if the goals of the rehabilitation procedure are achieved.
The creditor has the right to pay bonus remuneration to the bankruptcy manager using funds going to satisfy his/her claims. The size of and procedure for the payment of the bonus are determined by the creditor independently.

Footnote. Article 13 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 14. Competence of the Government of the Republic of Kazakhstan in the field of rehabilitation and bankruptcy

Government of the Republic of Kazakhstan shall perform the functions provided by this Law and other functions imposed on it by the Constitution, Laws of the Republic of Kazakhstan and acts of the President of the Republic of Kazakhstan.

Article 15. Competence of the authorized body

Authorized body shall:

1) maintain the register of notifications of persons entitled to carry out the activity of an administrator;

1-1) post a list of persons entitled to carry out the activities of an administrator on the website of the authorized body;

1-2) appoint a person, selected by a creditor for taxes and customs payments, a state body or a legal entity partially owned by the state, as an interim manager;

1-3) develop and approve the rules for selecting an interim manager, if the applicant is a creditor for taxes and customs payments, a state body or a legal entity partially owned by the state;

2) appoint candidacy to the rehabilitation or bankruptcy managers nominated by the creditors’ meeting;

3) dismiss rehabilitation and bankruptcy managers;

4) exercise state control over compliance with the legislation of the Republic of Kazakhstan on rehabilitation and bankruptcy;

5) consider current information on the progress of the rehabilitation procedure from the rehabilitation manager, on the progress of the bankruptcy procedure – from the interim manager, bankruptcy manager;

6) approve the forms of concluding report of the rehabilitation and bankruptcy managers;

7) request confirming documents from the participant of a financial sanation;

8) monitor compliance with the procedure for holding an electronic auction for the sale of the debtor’s property;

9) coordinate sale by the temporary manager of the bankrupt’s property in case provided by this Law;

10) notify the law enforcement bodies about available data indicating the presence of signs of premeditated bankruptcy;

11) consider complaints about actions (inaction) of the administrator;

12) take measures on detection of transactions consummated upon circumstances mentioned in Article 7 of this Law;

13) develop and approve the rules for posting a list of persons entitled to carry out the activities of an administrator, appointing and removing rehabilitation and bankruptcy managers on the website of the authorized body;

14) is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication);

15) request and receive information on debtors subjected to the rehabilitation or bankruptcy procedure from state bodies, legal entities and their officials;16) provide information to the temporary and bankruptcy managers on existence and numbers of banking accounts of the person in respect of whom there is the court decision that entered into legal force on declaring as bankrupt, on balances and financial motions on these accounts;

17) contest decisions and actions (omission) of the administrator in court in case of detection of the breach of this Law;

18) render electronic services with application of informational systems in accordance with the legislation of the Republic of Kazakhstan on informatization;

19) draw up protocols and consider the cases on administrative infractions, impose administrative sanctions within the competence in cases and in the manner established by the Law;

20) is excluded by the Law of the Republic of Kazakhstan dated 29.12.2014 No. 269-V (shall be enforced from 01.01.2015);

21) within the limits of its competence, give explanations and comments on the introduction, conduct and termination of procedures for debt restructuring, rehabilitation, bankruptcy and liquidation without initiating the bankruptcy procedure;

22) approve standard forms of an opinion of the interim administrator, interim manager and rehabilitation manager on the financial stability of the debtor, and also of the bankruptcy manager on the financial stability of the debtor, taking into account the implementation of the measures provided for by the rehabilitation plan;

23) is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication);
23-1) is excluded by the Law of the Republic of Kazakhstan dated 29.03.2016 № 479-V (shall be enforced upon expiry of twenty one calendar days after the day its first official publication);

23-2) develop and approve the rules for the qualification exam;

24) exercise other powers provided by this Law, other Laws of the Republic of Kazakhstan, acts of the President of the Republic of Kazakhstan and the Government of the Republic of Kazakhstan.

Footnote. Article 15 as amended by the Laws of the Republic of Kazakhstan dated 16.05.2014 No. 203-V (shall be enforced upon expiry of six months after the date of its first official publication); dated 29.12.2014 No. 269-V (shall be enforced from 01.01.2015); dated 13.11.2015 № 399-V (shall be enforced upon expiry of ten calendar days after the day its first official publication); dated 29.03.2016 № 479-V (shall be enforced upon expiry of twenty one calendar days after the day its first official publication); № 290-VI as of 27.12.2019 ( shall be enforced ten calendar days after its first official publication).

Article 16. Interaction of the authorized body with the state bodies

Authorized body shall interact with state bodies, ensure mutual informational exchange.
State bodies shall be obliged to render assistance to the authorized body in performance of tasks on carrying out the activity in the field of rehabilitation and bankruptcy.
Authorized body shall have the right to carry out interaction with state bodies by electronic methods in the manner established by the legislation of the Republic of Kazakhstan.

Article 17. State control over compliance with the legislation of the Republic of Kazakhstan on rehabilitation and bankruptcy

State control over compliance with the legislation of the Republic of Kazakhstan on rehabilitation and bankruptcy is carried out in the form of an inspection and preventive control.
The procedure for organizing and conducting an inspection and preventive control with a visit to the subject of control is determined by the Entrepreneurial Code of the Republic of Kazakhstan.

Preventive control without visiting the subject of control is carried out in accordance with the Entrepreneurial Code of the Republic of Kazakhstan and this Law.

Footnote. Article 17 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 18. Preventive control without visiting the subject of control

The goals of preventive control without visiting the subject of control are timely suppression, prevention of violations and enabling the subject of control to independently eliminate violations identified by the authorized body.

The subject of control is an administrator.

The way to carry out preventive control without visiting the subject of control is mutual comparison of data and information received by the authorized body, which include:

1) current and requested information on the progress of the rehabilitation procedure or bankruptcy procedure.

The form, procedure and terms for providing such information are established by the authorized body;

2) information from authorized state bodies, as well as from other sources, on the activities of the administrator and the debtor.

The state body, an individual and a legal entity, with regard to which the request of the authorized body has been received, are obliged, in the cases and in the manner prescribed by the laws of the Republic of Kazakhstan, to disclose any confidential information (banking, tax, commercial secrets) and submit copies of any documents containing confidential information relating to the debtor and the rehabilitation or bankruptcy procedure carried out by the administrator.

The time frame for executing the request of the authorized body is ten working days of its receipt, except for cases when a longer execution period is indicated in the request itself.

If, as a result of preventive control without visiting the subject of control, violations are revealed, it is necessary to send a notification in the form established by the authorized body, within five working days of their identification.

The notification shall be delivered to the subject of control in person against signature or in any other way, confirming the facts of its sending and receiving.

A notification sent in one of the following ways is considered delivered in the following cases:

1) by courier - from the date of a note of receipt in the notification;

2) by mail - from the date of notification of receipt of the postal item by registered mail;

3) electronically - from the date of its sending by the authorized body to the administrator’s email address specified in the notification of the commencement of activities or changes in data in the authorized body.

A notification of elimination of violations identified as a result of preventive control without visiting the subject of control shall be executed within ten working days of the day following the day of its delivery.
The subject of control, in case of disagreement with the violations specified in the notification, has the right to send an objection to the authorized body that sent the notification within five working days of the day following the day of the notification’s delivery.

If the notification is recognized as not executed, the authorized body shall issue a written decision and send it to the subject of control in one of the ways specified in paragraph 3 of this article.

A failure to comply with the notification on the elimination of violations identified as a result of preventive control without visiting the subject of control within the prescribed period entails the scheduling of preventive control with a visit to the subject of control by including it in the half-year list of preventive control with a visit to the subject of control.
If the authorized body reveals violations that cannot be eliminated, it is necessary to send a notification to the administrator in the form established by the authorized body, within five working days of the violation’s identification.
Preventive control without visiting the subject of control is carried out on a quarterly basis.

Footnote. Article 18 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 19. Direction of requests and receipt of information on the course of conducting the procedures

Footnote. Article 19 is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 20. Notifications

Footnote. Article 20 is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 21. Procedure for provision and receipt of current and requested information of the administrators

Footnote. Article 21 is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Chapter 2. CREDITORS

Article 22. Creditors’ participation in the rehabilitation procedure and bankruptcy procedure

In the course of rehabilitation and bankruptcy procedures, the interests of all creditors are represented by the creditors’ meeting set up in accordance with this Law.
The creditor has the right to appeal against a court judgment, the actions of the administrator in the course of the rehabilitation procedure or the bankruptcy procedure, if these decisions or actions infringe upon his/her legitimate interests.

Footnote. Article 22 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 23. The creditors’ meeting

The right to participate in the creditors’ meeting in the course of rehabilitation and bankruptcy procedures belongs to creditors whose claims are included in the register of creditors’ claims as of the date of holding the creditors’ meeting.

An individual entrepreneur - a debtor, an owner of property (a person authorized by him/her), founders (participants in) of a legal entity - a debtor and representatives of the authorized body have the right to participate in the creditors’ meeting.

The powers of the creditors’ meeting are provided for by Articles 75 and 93 of this Law.

Footnote. Article 23 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 24. Order of convening creditors’ meeting

The creditors’ meeting shall be organized and held by the administrator, unless otherwise provided for by this paragraph.

The creditors’ meeting is organized by the creditors’ committee when considering the dismissal of the rehabilitation manager, as well as the dismissal of the bankruptcy manager and simultaneous selection of the bankruptcy manager.

Creditors’ meeting may be created at the initiative of:

1) debtor;

2) administrator;

3) creditors’ commission;

4) creditors the requirements of which are no less than ten percent from total sum of requirements of the creditors included into the register, or no less than ten percent of total number of the creditors.

Footnote. Article 24 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 25. Informational message on holding the creditors’ meeting

For the purposes of this Law, creditors and also other persons entitled to participate in a meeting of creditors are deemed to be properly notified, if:

1) the authorized body published a notice on a meeting of creditors in the Kazakh and Russian languages on the Internet resource at least ten working days before the date of the meeting of creditors;

2) a notice on a meeting of creditors in the Kazakh and Russian languages was delivered to a creditor by hand against receipt at least ten working days before the date of the meeting of creditors;

3) a notice on a meeting of creditors was sent to a creditor by registered mail at least fifteen working days before the date of the meeting of creditors.

If it is impossible to notify the creditor in the manner prescribed by subparagraph 2) of part one of this paragraph, the method established by subparagraph 1) of part one of this paragraph shall be recognized as proper notification of such a creditor.

If the debtor has an Internet resource, it is mandatory to publish a notice on a meeting of creditors in the Kazakh and Russian languages on this Internet resource at least ten working days before the date of the meeting of creditors.

The effect of this paragraph does not extend to notifying creditors about the first meeting of creditors held in the course of rehabilitation or bankruptcy proceedings. The procedure for sending a notice on the first meeting of creditors to creditors is determined by:

paragraph 6 of article 72 of this Law - for rehabilitation proceedings;

paragraph 1 of article 91 of this Law- for bankruptcy proceedings.

The administrator, and in cases where the creditors’ meeting is organized by the creditors’ committee - the chairman of the creditors’ committee, within two working days of creditors’ notification of the creditors’ meeting, shall send a notification of the creditors’ meeting in the Kazakh and Russian languages to the authorized body for posting it on the website of the authorized body.

The authorized body must place the notice on its Internet resource within two working days from the day of its receipt.

Message on holding the creditors’ meeting shall contain the following details:

name, legal address of the debtor;

date, time and place of holding the creditors’ meeting;

agenda of the creditors’ meeting;

procedure for familiarization with materials subjected to consideration by the creditors’ meeting.

The agenda shall contain issues proposed for consideration, which are directly within the competence of the creditors’ meeting. When forming the agenda, it is not allowed to use wordings of extended interpretation.

In case of impossibility of directly participation in the meeting, the creditor shall have the right to vote by absentee ballot, as well as by registered mail or by electronic method, with the exception of the first creditors’ meeting.

If the creditor votes in absentia, he/she shall notify the rehabilitation or bankruptcy manager thereof at least five working days before the meeting.

Rehabilitation or bankruptcy manager shall be obliged to direct or represent materials related to the agenda for familiarization of the creditor no later than three business days before holding the meeting.

Footnote. Article 25 as amended by the Law of the Republic of Kazakhstan dated 27.02.2017 № 49-VI (shall be enforced upon expiry of ten calendar days after the day its first official publication); № 290-VI as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 26. The decision making procedure by creditors meeting during the rehabilitation procedure and bankruptcy proceedings

The general procedure for competence and decision making by creditors meeting shall be determined in accordance with this Article.

The specifics of competence and decision making procedure by creditors meeting shall be determined by:

paragraph 6 of Article 99 of this Law - in case of direct sale of the debtor’s property;

Article 26-1 of this Law - upon approval of the rehabilitation plan;

Article 26-2 of this Law - upon making amendments and (or) additions to the rehabilitation plan.

The creditors’ meeting shall be competent if attended by creditors, including those voting in absentia, having fifty or more percent of the total number of votes of creditors eligible to vote for a decision made by the creditors’ meeting.

It is not allowed to postpone the consideration of issues on the agenda of the creditors’ meeting if the latter is competent with account of the provisions of part one of this paragraph.

A re-convened meeting of creditors is competent if attended by creditors having at least twenty-five percent of the total number of votes of creditors eligible to vote for a decision made by the creditors’ meeting provided that creditors were duly notified of the time and place of the creditors’ meeting.

Decisions of a meeting of creditors shall be made by the majority of votes of the number of votes of creditors, including those voting in absentia, attending the meeting of creditors, except for cases provided by Articles 26-1 and 26-2 of this Law.

The administrator, and in cases where the creditors’ meeting is organized by the creditors’ committee - the chairman of the creditors’ committee, determines the number of votes of each creditor on the basis of “one tenge of claims - one vote” for making decisions by creditors.

Penalty (fines, late fee), losses in the form of lost profits, as well as other property and (or) financial sanctions shall not be taken into account for the purposes of determining the number of votes at a meeting of creditors, unless otherwise provided for by this Paragraph.

For the purposes of determining the number of votes at a meeting of creditors, creditors’ claims in the form of a penalty (fine, late fee), losses in the form of lost profits, as well as other property and (or) financial sanctions shall be taken into account in cases such as:

1) full satisfaction of claims of creditors having the right to vote for a decision at a meeting of creditors;

2) formation of a register of creditors’ claims consisting solely of those to pay penalty (fines, late fee), losses in the form of lost profits, other property and (or) financial sanctions by the decision of a court.

As claims of a creditor are satisfied, the number of his/her votes shall be reduced by the amount of satisfied claims.

Part five of this paragraph does not apply when determining the eligibility of and making a decision by the creditors’ meeting in case of considering the approval of a final report.

When making decisions by the meeting of creditors, they shall not have the right to vote:

1) creditors deprived of the right to vote in accordance with paragraph 3 of Article 72 and paragraph 5 of Article 90 of this Law;

2) creditors who are affiliates with respect to the debtor, until full satisfaction of the claims of other creditors.

For the purposes of determining the votes of creditors, when making a decision by the meeting, the creditor shall not be considered participating in the meeting of creditors in case of his refusal to vote.

If the creditor shall not appear at the meeting of creditors without a good reason twice, the number of votes of such a creditor shall not be taken into account when determining the competency of the meeting of creditors.

As a good reason, if there is a supporting document, the following shall be recognized:

1) temporary incapacity to labour of the creditor or his authorized representative;

2) the occurrence of an emergency preventing the participation of the creditor or his authorized representative in the meeting of creditors;

3) another reason by decision of the meeting of creditors.

The administrator, and in cases where the creditors’ meeting is organized by the creditors’ committee - the chairman of the creditors’ committee, prior to the opening of the creditors’ meeting, shall register the meeting’s participants.

The decisions of the creditors’ meeting are documented by the minutes.

The creditors’ meeting is chaired by a chairman elected from among attending creditors eligible to vote. The minutes are kept by a secretary elected from among attending creditors eligible to vote. The chairman and secretary are elected by a simple majority of attending creditors. The minutes are signed by the chairman, administrator, secretary on the day of the meeting and certified by the debtor’s seal (if any).

The administrator is not required to sign minutes of the creditors’ meeting if the latter is organized by the creditors’ committee in the cases specified in subparagraphs 10-1) and 10-2) of Article 76 and subparagraph 7) of Article 94 of this Law.

The minutes of the creditors; meeting shall be drawn up by the secretary in three copies, one of which, after signing, is transferred to the authorized body within three working days, the second - to the creditors’ committee, the third - to the administrator.

The minutes of the creditors’ meeting shall also contain the copies of:

1) a sheet of registered meeting participants;

2) materials presented to the meeting participants for familiarization and (or) approval;

3) documents confirming proper notification of creditors about the date and place of the creditors’ meeting;

4) other documents at the discretion of the administrator or the chairman of the creditors’ committee.

A decision of the creditors’ meeting may be appealed by procedures’ participants within one month of its adoption.

Footnote. Article 26 is in the wording of the Law of the Republic of Kazakhstan dated 24.05.2018 № 156-VI (shall be enforced upon expiry of ten calendar days after its first official publication); as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 26-1. Agreement of the rehabilitation plan

When agreeing the rehabilitation plan, the meeting of creditors shall be competent if it is attended by creditors, having over fifty percent of the votes of the number of votes of creditors, the claims of which must be satisfied separately in the second and fourth priorities.
The rehabilitation plan shall be considered agreed if voted for at the same time:

1) the majority of votes of the number of votes of creditors of the second priority;

2) the majority of votes of the number of votes of creditors of the fourth priority.

In case of non-compliance with one or both of the conditions provided by Subparagraphs 1) and 2) of part one of this Paragraph, the rehabilitation plan shall be considered unagreed.

Footnote. Chapter 2 is supplemented by Article 26-1 in accordance with the Law of the Republic of Kazakhstan dated 24.05.2018 № 156-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 26-2. Introduction of changes and (or) additions to rehabilitation plan

When approving the introduction of changes and (or) additions to the rehabilitation plan, the meeting of creditors shall be competent if it is attended by creditors, whose interests shall be affected by changes and (or) additions made to the rehabilitation plan, including creditors whose claims must be satisfied in one priority with such creditors and (or) as part of subsequent priorities, having a number of votes comprising more than fifty percent of the number of creditors' votes, the claims of which shall be satisfied in each priority separately.
The decision of the meeting of creditors on approval of amendments and (or) additions to the rehabilitation plan shall be taken by creditors whose interests are affected by the amendments and (or) additions made to it, including creditors, the claims of which must be satisfied in one priority with such creditors and (or) as part of subsequent priorities, if a majority of votes for each priority shall be voted for separately.
In case of non-compliance with the conditions provided by this Article, the introduction of changes and (or) additions to the rehabilitation plan shall be considered unagreed.
If the votes of the creditors are equal in a separate vote upon agreement of introduction the amendments and (or) additions to the rehabilitation plan, decisions of the meeting of creditors shall be adopted by a majority of the total number of votes of creditors, including absentee voters, participating in the meeting of creditors on the "one tenge of claims - one vote” basis.

Footnote. Chapter 2 is supplemented by Article 26-2 in accordance with the Law of the Republic of Kazakhstan dated 24.05.2018 No. 156-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 27. The creditors’ committee

In case of rehabilitation and bankruptcy procedures, it is necessary to set up the creditors’ committee in the manner prescribed by this Law.

If it is impossible to comply with the requirement for the minimum number of members of the creditors’ committee provided for by part one of paragraph 2 of this article, the powers of the creditors’ committee shall be exercised by the creditors’ meeting.

The composition of the creditors’ committee is formed and approved by the creditors’ meeting. The minimum number of members of the creditors’ committee shall be at least three people.

The creditors’ committee shall include one creditor from each group of homogeneous creditors, unless otherwise provided for by this paragraph.

A creditor who does not form a group of homogeneous creditors due to the absence of other creditors with identical claims against the debtor may be included in the creditors’ committee.

A member of the creditors’ committee may not be an affiliate or be deprived of the right to vote at the creditors’ meeting.

The grounds for changing the formed and approved composition of the creditors’ committee are:

1) fulfillment of obligations to a creditor that is a member of the creditors’ committee;

2) circumstances that prevent a creditor from being a member of the creditors’ committee (final and binding judicial acts, the creditor’s liquidation or death, etc.);

3) identification of affiliated persons;

4) failure of a member of the creditors’ committee to attend its meetings more than twice without a valid reason specified in subparagraphs 1) and 2) of part four of paragraph 4 of Article 26 of this Law.

The administrator shall send a notification of a meeting of the creditors’ committee by registered mail at least five working days before the date of the meeting.

When the powers of the creditors’ committee are exercised by the creditors’ meeting in the case specified in part two of paragraph 1 of this article, the notification of a meeting of the creditors’ meeting shall be sent in the manner prescribed by this article.

The powers of the creditors’ committee are provided for by Articles 76 and 94 of this Law.

Footnote. Article 27 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 28. Adoption of decisions by the creditors’ committee

A meeting of the creditors’ committee shall be competent if attended by at least two-thirds of the total number of the committee members.
The creditors’ committee adopts decisions by a simple majority of votes of the total number of members of the creditors’ committee based on the “one committee member - one vote” principle.

If the vote is a tie, the chairman of the creditors’ committee shall have a casting vote under the voting procedure.

A meeting of the creditors’ committee is documented in its minutes.

The minutes shall contain information on the date and place of the meeting, the members of the creditors’ committee who took part in the voting, the agenda, the results of voting and the decisions made. The minutes are signed by all members of the creditors’ committee who participated in the voting, by the administrator and certified by the debtor’s seal (if any).

The administrator, within three working days of signing the minutes, sends it to the authorized body, members of the creditors’ committee. One copy of the minutes is kept by the administrator.

Creditors, an individual entrepreneur - a debtor, an owner of property (a person authorized by him/her), founders (participants in) of a legal entity - a debtor have the right to participate in a meeting of the creditors’ committee.
When the powers of the creditors’ committee are exercised by the creditors’ meeting in the case specified in part two of paragraph 1 of Article 27 of this Law, the creditors’ meeting shall adopt decisions in the manner prescribed by this article.
The decision of the creditors’ committee may be appealed by the procedures’ participants within one month of its adoption.

Footnote. Article 28 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Chapter 2 -1. Insolvency resolution procedure

Footnote. The Law is supplemented by Chapter 2-1 in accordance with the Law of the Republic of Kazakhstan dated 13.11.2015 № 399-V (shall be enforced upon expiry of ten calendar days after the day its first official publication).

Article 28-1. Making a decision on insolvency resolution

The debtor has the right to decide on the restructuring of his/her/its debts in the event of temporary insolvency determined in accordance with paragraph 1 of Article 5-1 of this Law, provided that there are no court-initiated rehabilitation or bankruptcy proceedings, unless otherwise provided for by this article.
The debtor files a debt restructuring application with court together with documents confirming temporary insolvency.

Concurrently with petitioning the court, the debtor notifies his/her/its creditors.

At the same time, the debtor is not entitled to file such a petition to court, unless one year expired since:

the entry into force of a court ruling refusing to approve a debt restructuring agreement;

expiration of the term established by paragraph 1 of article 28-3 of this Law, provided that an insolvency resolution agreement is not concluded.

The court, within ten working days of acceptance of the debtor’s debt restructuring application, makes one of the following decisions:

1) to apply an insolvency resolution procedure;

2) to refuse to apply an insolvency resolution procedure;

A ground for the court’s refusal to apply a procedure for resolving the debtor’s insolvency is the absence of signs of the debtor’s insolvency provided for by subparagraphs 1), 2) and 3) of paragraph 1 of article 5 of this Law.

A court decision on the application of an insolvency resolution procedure shall be enforced immediately.
The debtor shall promptly notify the authorized body and creditors of the decision made by court.
The authorized body shall, within two working days from the date of receipt of the notice, place an announcement on the application of an insolvency resolution procedure in respect of the debtor in the Kazakh and Russian languages on the Internet resource of the authorized body.

Footnote. Article 28-1 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 28-2. Consequences of the application of an insolvency resolution procedure

From the date of a court judgment on the application of the debt restructuring procedure to the debtor, the following consequences occur:

1) termination of accrual of penalty (late fee, fines) for all types of the debtor’s indebtedness;

2) banning a creditor (creditors) from petitioning the court for declaring the debtor bankrupt within the period of concluding an insolvency resolution agreement;

3) the debtor is prohibited from making any transactions for the alienation of property.

Footnote. Article 28-2 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 28-3. Insolvency resolution agreement

Within two months from the date of entry into legal force of a court decision on the application of an insolvency resolution procedure, a debtor is obliged to conclude an insolvency resolution agreement with all creditors.
The insolvency resolution agreement must contain provisions on the terms of the agreement, the procedure, methods and deadline for the fulfillment of the debtor’s obligations to the creditor (creditors).

2-1. In the event that concluding an insolvency resolution agreement, one of the creditors shall be a state agency, an insolvency resolution agreement can be concluded on an installment plan for repayment of debt to such a state agency for a period no more than three years from the date of approval of the agreement.

Provided that the requirements of part one of this paragraph are met, tax debts are paid off upon the security of the property of the debtor and (or) a third party, and (or) a bank guarantee.

The property pledged shall be liquid, insured against loss or damage, and its market value may not be less than the amount of tax debts. It is not allowed to pledge:

1) vital infrastructure;

2) electrical, thermal and other types of energy;

3) distrained property;

4) property for which there are restrictions imposed by state agencies;

5) property encumbered with the rights of third parties;

6) short life raw materials, food.

he insolvency resolution agreement is concluded for a period not exceeding three years.

Third parties are allowed to be parties to the insolvency resolution agreement provided that they assume the rights and obligations thereof.
The insolvency resolution agreement may be concluded on such terms as:

1) deferment and (or) extension of the deadline of the debtor’s obligations;

2) assignment of the debtor’s rights of claim;

3) full or partial forgiveness of debt;

4) writing-off a penalty (late fee, fines);

5) reduction of the amount of remuneration for received loans;

6) satisfaction of claims of the creditor (creditors) in other ways that are not contrary to the legislation of the Republic of Kazakhstan.

A debt restructuring agreement is drawn up in writing in Kazakh and Russian and signed by an individual entrepreneur - a debtor, the owner of the property (a person authorized by him/her), the founder (participant in) of a legal entity - a debtor, and each creditor.

If a creditor disagrees with the terms of the agreement, such an agreement cannot be concluded.

If an agreement is not concluded, the debt restructuring procedure is considered completed and the consequences that have occurred in accordance with the below indicated are terminated:

1) subparagraph 1) of Article 28-2 of this Law - from the day of a court judgment on the application of the debt restructuring procedure;

2) subparagraphs 2) and 3) of Article 28-2 of this Law - from the date of expiry of the term for concluding a debt restructuring agreement, specified in paragraph 1 of this article.

Footnote. Article 28-3 as amended by the Law of the Republic of Kazakhstan dated 24.05.2018 № 156-VI (shall be enforced upon expiry of ten calendar days after its first official publication); № 290-VI as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 28-4. Affirmance of an insolvency resolution agreement by court

A debtor shall, within the period specified in paragraph 1 of article 28-3 of this Law, petition the court for the affirmance of an insolvency resolution agreement.
An application for the approval of a debt restructuring agreement shall be submitted by the debtor together with:

1) a debt restructuring agreement signed by an individual entrepreneur - the debtor, the owner of the property (a person authorized by him/her), the founder (participant in) of a legal entity - the debtor, and each creditor;

2) a list of all creditors indicating their place of residence or location, as well as the amounts owed.

As a result of consideration of the debtor’s petition for the affirmance of the insolvency resolution agreement, the court rules:

1) either to affirm the insolvency resolution agreement;

2) or to refuse to affirm the insolvency resolution agreement.

Grounds for the court’s refusal to affirm the insolvency resolution agreement are as follows:

1) violation of the rights and legal interests of creditors and (or) third parties;

2) the insolvency resolution agreement is contrary to the legislation of the Republic of Kazakhstan.

The insolvency resolution agreement is binding on the debtor, creditor (creditors) and/or third parties to the agreement, from the date of entry into legal force of a court decision on the affirmance of such an agreement.
If the court refuses to approve the agreement, the procedure for restructuring the debtor’s debt is considered completed and the consequences that have occurred in accordance with the below indicated are terminated:

1) subparagraph 1) of Article 28-2 of this Law - from the day of a court judgment on the application of the debt restructuring procedure;

2) subparagraphs 2) and 3) of Article 28-2 of this Law - from the date of entry into force of a court ruling on the refusal to approve the debt restructuring agreement.

The creditor (creditors) has (have) the right to file an application for terminating the debt restructuring agreement with court in cases of:

1) violation of the terms of such an agreement by the debtor;

2) a failure to conclude a debt restructuring agreement within the time frame specified in paragraph 1 of Article 28-3 of this Law.

8-1. In case of termination of the agreement, the debt restructuring procedure is considered completed, and the consequences that have occurred in accordance with Article 28-5 of this Law are terminated from the date of entry into force of a court ruling on the termination of the debt restructuring agreement.

A creditor (creditors) may not, during the validity period of an insolvency resolution agreement, petition the court for declaring the debtor bankrupt, if the debtor complies with all the terms of such an agreement.

Footnote. Article 28-4 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 28-5. Consequences of the affirmance of an insolvency resolution agreement by court

Consequences of a court ruling to affirm an insolvency resolution agreement, from the date of its entry into legal force, may be as follows:

1) termination of accrual of penalty (late fee, fines) for all types of the debtor’s arrears;

2) lifting of all state bodies’ restrictions on the debtor’s accounts without relevant decisions of the bodies that imposed them;

3) termination of execution of previous court decisions, arbitral awards, except for payments to citizens, to whom the debtor is liable for causing damage to their life or health without account of claims of compensations for non-pecuniary damage, which became due after the conclusion of the insolvency resolution agreement;

4) imposition of new arrests on the debtor’s property and other restrictions on the disposal of his/her/its property is permitted only with regard to claims, brought against the debtor, for recognizing the transaction to be invalid and reclamation of property from unlawful possession.

Footnote. Article 28-5 as amended by the Law of the Republic of Kazakhstan dated 08.04.2016 № 489-V (shall be enforced upon expiry of ten calendar days after the day its first official publication).

Chapter 3. ACCELERATED REHABILITATION PROCEDURE

Footnote. Chapter 3 is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Chapter 4. CONSIDERATION OF CASES ON REABILITATION OR
BANKRUPTCY IN A JUDICIAL PROCEEDING

Article 38. Procedure for initiating rehabilitation and bankruptcy proceedings

A court initiates a rehabilitation proceeding pursuant to an application of a debtor or a creditor (creditors), except for a creditor for taxes and customs payments, a state body or a legal entity partially owned by the state given the grounds specified in paragraph 1 of Article 5-1 of this Law.

The debtor also has the right, within seven working days of receipt of a copy of a court ruling to initiate a bankruptcy proceeding, to send file an application for the rehabilitation procedure with court.

A court initiates a bankruptcy proceeding pursuant to an application of a debtor, a creditor (creditors) given grounds specified in Article 5 of this Law, that of a prosecutor - in the cases specified in Article 47 of this Law, that of a rehabilitation manager - in the case specified in paragraph 2 of Article 83 of this Law.
Rehabilitation or bankruptcy proceedings shall be deemed initiated from the date of a court ruling on the acceptance of an application for the rehabilitation procedure or a bankruptcy petition.
The bankruptcy petition filed by the debtor, the rehabilitation manager cannot be withdrawn without a relevant court judgment. The creditor (creditors), the prosecutor can withdraw their applications before a judgment to declare the debtor bankrupt is made.

Footnote. Article 38 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 39. Persons participated in case on rehabilitation or bankruptcy

Persons participated in case on rehabilitation or bankruptcy may be:

1) the debtor;

2) the creditors;

3) representative of the creditors on payment for labour;

4) prosecutor;

5) the owner of property (a body authorized by him/her), a founder (participant in) of a legal entity - a debtor;

6) authorized body;

7) the administrator.

8) is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).
Footnote. Article 39 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 40. Application of the debtor

The debtor files an application for the rehabilitation procedure or a bankruptcy petition with court on the basis of a decision:

1) of the body of legal entity authorized by its constitutive documents;

2) of an individual entrepreneur - a debtor, the owner of property (a body authorized by him/her), a founder (participant in) of a legal entity - a debtor.

The debtor is obliged to file a bankruptcy petition with court in the case specified in subparagraph 1) of paragraph 2 of Article 11 of this Law.

Footnote. Article 40 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 41. Form and content of application of the debtor

The debtor files his/her/its application with court in writing or in the form of an electronic document. It is signed by the head of the debtor - a legal entity or by a person acting for him/her in accordance with the constituent documents, or by the debtor - an individual entrepreneur.
Application of the debtor shall contain:

1) name of court to which the application is filed;

2) substantiation of impossibility to satisfy the requirements of the creditors;

3) details on its available property, as well as the property impaired by the pledge, being in property lease (rent) and (or) in financial lease, on money being on banking accounts, numbers of accounts and location of banks, list of obligors with specification of their location and sum of their debts;

4) details on obligations, the term of which is not matured;

5) information on the relation of the activity to a natural monopoly sphere;

5-1) surname, name, patronymic (if it is indicated in the identity document) or name, individual identification number or business identification number of the person with whom an agreement has been concluded on exercising the powers of an interim manager or interim administrator;

6) list of accompanied documents.

Application of the debtor may include the other details, if they are necessary for consideration of bankruptcy case or rehabilitation, as well as petitions of the applicant.

At the same time with filing the application to the court, the debtor shall be obliged to direct copies of application and accompanied documents to the authorized body.

Footnote. Article 41 as amended by the Law of the Republic of Kazakhstan dated 28.12.2016 № 34-VI (shall be enforced from 01.01.2017); № 290-VI as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 42. Documents accompanied to application of the debtor

Application of the debtor on declaring it as bankrupt shall be accompanied by the documents confirming:

1) payment of state duty in established manner and amount;

2) persistent insolvency, which is a ground for a debtor to file a bankruptcy petition in accordance with paragraph 1 of Article 5 of this Law;

3) other circumstances on which application of the debtor is based.

Application of the debtor on declaring it as bankrupt shall be also accompanied by:

1) the decision of the individual entrepreneur - the debtor, the owner of the property (the body authorized by him/her), the founder (participant in) of the legal entity - the debtor, which is a ground for the debtor to file a bankruptcy petition with court;

2) financial statements as at the date of filing the application and as at the beginning of the year in which the application was filed, as well as in the case provided for by this Law, as at the beginning of the year preceding the year of filing the application, a list of all creditors and debtors (individual identification number or business identification number, surname, name, patronymic (if it is indicated in the identity document) and (or) full name, legal address) indicating the amount and date of formation of the relevant debt;

3) minutes of the meeting (conference) of creditors for wages (if there are such creditors), at which their representative was elected by secret ballot to participate in the bankruptcy case;

4) copies of constitutive documents;

5) the opinion of the authorized body in charge of natural monopoly spheres submitted by it within seven working days of receipt of a written notification of the debtor about his/her filing a bankruptcy petition with court, if the debtor is a natural monopoly entity;

6) is excluded by the Law of the Republic of Kazakhstan dated 28.12.2016 № 34-VI (shall be enforced from 01.01.2017);

7) information on claims against the debtor accepted by courts for hearing, motions for judgment, and also the requirements for undisputable (acceptance-free) write-off;

8) a copy of the agreement on the exercise of the powers of the interim manager, concluded between the debtor and the person entitled to carry out the activities of an administrator.

The rehabilitation manager’s application for terminating the rehabilitation procedure, declaring the debtor bankrupt and liquidating it with the initiation of the bankruptcy procedure shall be submitted together with the minutes of the creditors’ meeting and also an opinion that the debtor belongs to the III class of financial stability and there are grounds for declaring him/her/it bankrupt.
Application of the debtor on applying rehabilitation procedure shall be accompanied by the document confirming:

1) payment of state duty in established manner and amount;

2) temporary insolvency, which is a ground for a debtor to apply for the rehabilitation procedure in accordance with paragraph 1 of Article 5-1 of this Law;

3) other circumstances on which application of the debtor is based.

Application of the debtor on applying rehabilitation procedure shall be also accompanied by:

1) the decision of the individual entrepreneur - the debtor, the owner of the property (a body authorized by him/her), the founder (participant in) of the legal entity - the debtor, which is a ground for the debtor to apply to court for the rehabilitation procedure;

2) financial statements as at the date of filing the application and as at the beginning of the year in which the application was filed, as well as in the case specified in this Law, as at the beginning of the year preceding the year of filing the application, a list of all creditors and debtors (individual identification number or business identification number, surname, name, patronymic (if it is indicated in the identity document) and (or) full name, legal address) indicating the amount and date of formation of the relevant debt;

3) details on claims against the debtor accepted for proceeding, as well as on requirements submitted to indisputable (acceptance-free) write-off.

4) copies of constitutive documents;

5) a copy of the agreement on the exercise of the powers of an interim administrator, concluded between the debtor and a person entitled to carry out the activities of an administrator.

In the case provided for by paragraph 4 of article 95-1 of this Law, the debtor shall also attach to the application for rehabilitation proceedings the following documents:

1) the rehabilitation plan, agreed in accordance with the procedure provided for by article 95-1 of this Law;

2) minutes of a meeting of creditors on the approval of the rehabilitation plan;

3) the opinion of the bankruptcy manager on the financial stability of the debtor, taking into account the implementation of the measures provided for by the rehabilitation plan.

Footnote. Article 42 as amended by the Laws of the Republic of Kazakhstan dated 13.11.2015 № 399-V (shall be enforced upon expiry of ten calendar days after the day its first official publication); dated 28.12.2016 № 34-VI (shall be enforced from 01.01.2017); № 290-VI as of 27.12.2019 (shall be enforced ten calendar days after its first official publication)

Article 43. Return of application of the debtor without consideration

Footnote. Article 43 is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 44. Application of the creditor (creditors)

Case on bankruptcy or rehabilitation may be initiated on the basis of application of the creditor (creditors) in civil and other obligations.
Application of the creditor (creditors) shall include)

1) name of court to which the application is filed;

2) surname, name, patronymic (if it is indicated in the identity document) or the name, location of the debtor;

3) surname, name, patronymic (if it is indicated in the identity document), location of the creditor (creditors) - an individual or the name, location of the creditor (creditors) - a legal entity;

4) obligation of the debtor before the creditor (creditors) from which his (her) requirement is occurred, the term of fulfilling this obligation;

5) essence and sum of requirements of this creditor (creditors) to the debtor;

6) sum of debts on obligation and remuneration (behalf), penalty (fine, late fee) accrued on this sum and losses subjected to recovery from the debtor;

7) the established legal grounds for the claims of the creditor (creditors) (a judicial act or a writ of execution on the recovery of money from the debtor, recognition of the debt by the debtor, if the applicant is a creditor for taxes and customs payments - information on the adoption of all measures of mandatory collection of tax arrears, as well as arrears in customs payments, special, anti-dumping, countervailing duties, interest in the manner prescribed by the tax and customs legislation of the Republic of Kazakhstan);

8) details known to the creditor (creditors) about available property of the debtor;

9) is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication);

10) list of attached documents;

11) surname, name, patronymic (if it is indicated in the identity document) or name, individual identification number or business identification number of the person with whom an agreement was concluded on the exercise of the powers of an interim manager or interim administrator.

In the event that the applicant is a creditor for taxes and customs payments or a state body or a legal entity partially owned by the state, a candidate for an interim manager is selected in the manner determined by the authorized body;

12) other details if they are necessary for consideration of case on bankruptcy or rehabilitation.

At the same time with filing application to the court, the creditor (creditors) shall be obliged to direct copies of the application and accompanied documents to the debtor, authorized body.
Is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).
Footnote. Article 44 as amended by the Law of the Republic of Kazakhstan dated 29.12.2014 No. 269-V (shall be enforced from 01.01.2015); № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 45. Documents attached to application of the creditor

Application of the creditor on declaring the debtor as bankrupt shall be accompanied by the documents confirming:

1) payment of state duty in established manner and amount;

2) direction of copies of the application of the creditor and accompanied documents to the debtor and authorized body;

3) obligations of the debtor before the creditor, as well as existence and sum of debts on these obligations;

4) substantiation of requirements of the creditor (enforcement documents, court decision or written recognition of requirements of the creditor by the debtor);

5) is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication);

6) other circumstances (if any) underlying the creditor’s application.

A copy of the agreement on the exercise of the powers of an interim manager, concluded between the creditor and the person entitled to carry out the activities of an administrator, is attached to the creditor’s application.

In the event that the applicant is a creditor for taxes and customs payments or a state body or a legal entity partially owned by the state, an agreement on the exercise of the powers of an interim manager is not concluded.

Is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).
Application of the creditor (creditors) on applying rehabilitation procedure shall be accompanied by the documents confirming:

1) payment of state duty in established manner and amount;

2) direction of the copy of application and accompanied documents to the debtor;

3) obligations of the debtor before the creditor, as well as existence and sum of debts on these obligations;

4) is excluded by the Law of the Republic of Kazakhstan dated 22.04.2015 No. 308-V (shall be enforced upon expiry of ten calendar days after the date of its first official publication);

5) other circumstances (when available) on which application of the creditor is based.

Footnote. Article 45 as amended by the Laws of the Republic of Kazakhstan dated 29.12.2014 No. 269-V (shall be enforced from 01.01.2015); dated 22.04.2015 No. 308-V (shall be enforced upon expiry of ten calendar days after the date of its first official publication); № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 45-1. Dismissal of an application of a debtor or creditor (creditors)

If the debtor files an application for the rehabilitation procedure or a bankruptcy petition with court that do not meet the requirements specified in Articles 41 and 42 of this Law, this is a ground for a court to dismiss the application and the petition.
In cases where it is mandatory for the debtor to file a bankruptcy petition with court in accordance with this Law and the required documents are not attached to the petition, the court initiates a proceeding on the petition, and requests the missing documents in order to prepare the case for a court hearing.
The court shall dismiss an application of the creditor (creditors) that fails to meet the requirements specified in Articles 44 and 45 of this Law.

Footnote. Chapter 4 is supplemented with Article 45-1 in accordance with Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 46. Connection of requirements of one or several creditors

Creditor shall have the right to connect several requirements to the debtor I one application on different obligations.
Creditors shall have the right to combine own requirements to the debtor and refer to the court with one application. Such application shall be signed by the creditors that combined the requirements.

Article 47. Application of the prosecutor

Prosecutor shall refer to the court with application on declaring the debtor as bankrupt:

1) when he (she) detected signs of premeditated bankruptcy;

2) in behalf of the creditor – Republic of Kazakhstan, state bodies.

Application of the prosecutor shall be filed to the court in compliance with requirements provided by this Law in respect of application of the creditor, unless otherwise provided by the legislative acts of the Republic of Kazakhstan or followed from the essence of legal relations.

Article 48. Initiation of the proceeding with regard to case onrehabilitation or bankruptcy

Having received an application for the rehabilitation procedure or a bankruptcy petition meeting the requirements established by this Law, the court shall issue a ruling to initiate a case within five working days of receipt of the application, and in the case specified in paragraph 1 of Article 53 of this Law - within three working days of a judgment to suspend a bankruptcy proceeding.

Ruling on initiation of case shall contain obligation of state and other agencies, as well as the State Corporation "Government for Citizens" carrying out registration of rights to property, on imposition of restrictions provided by Paragraph 1 of Article 50 of this Law.

1-1. The court shall dismiss an application for the rehabilitation procedure if it is submitted before the expiration of two years from the date of entry into force of a court judgment on the refusal to apply the rehabilitation procedure or a court ruling on the termination of the rehabilitation procedure.

Copies of court ruling on initiation of case shall be directed by the court to the debtor, applicant, authorized agency, to the state and other agencies, as well as the State Corporation "Government for Citizens" carrying out registration of rights to property, regional chamber of private court bailiffs and to the territorial authority of justice at location of the debtor.
The authorized body, within two working days of a court ruling on the initiation of bankruptcy proceedings, appoints an interim manager if the applicant is a creditor for taxes and customs payments or a state body or legal entity partially owned by the state.
Is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).
5. Is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).
Footnote. Article 48 as amended by the Law of the Republic of Kazakhstan dated 29.09.2014 No. 239-V (shall be enforced upon expiry of ten calendar days after the date of its first official publication); dated 29.03.2016 № 479-V (shall be enforced upon expiry of twenty one calendar days after the day its first official publication); dated 07.04.2016 № 487-V (shall be enforced upon expiry of six months after the day its first official publication); dated 24.05.2018 No. 156-VI (shall be enforced upon expiry of ten calendar days after its first official publication); № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 49. Opinion of an interim administrator and interim manager on the debtor’s financial stability

Based on the results of collected information on the financial condition of the debtor, the interim manager, during a bankruptcy proceeding in court, draws up an opinion on the financial stability of the debtor, containing one of the following conclusions:

1) the debtor belongs to the I class of financial stability, the bankruptcy petition is unfounded;

2) the debtor belongs to the II class of financial stability, there are no grounds for declaring the debtor bankrupt, but there are grounds for applying the rehabilitation procedure;

3) the debtor belongs to the III class of financial stability, there are grounds for declaring him/her/it bankrupt.

The opinion on the financial stability of the debtor, specified in paragraph 1 of this article, shall not be drawn up in cases where:

1) the debtor has no other creditors besides the applicant.

The provisions of this subparagraph do not apply when the applicant is a creditor for taxes and customs payments or a creditor to whom the writ of execution was returned in accordance with subparagraph 2) of paragraph 1 of Article 48 of the Law of the Republic of Kazakhstan “On Enforcement Proceedings and the Status of Enforcement Agents”;

2) the debtor did not provide the interim manager with access to the accounting documentation.

The interim manager, within ten working days of a court ruling to initiate a bankruptcy proceeding, and if the applicant is a creditor for taxes and customs payments or a state body or legal entity partially owned by the state, from the date of his/her appointment, draws up an act:

1) on the inexpediency of drawing up an opinion on the financial stability of the debtor - in the case specified in subparagraph 1) of paragraph 2 of this article;

2) on the impossibility of drawing up an opinion on the financial stability of the debtor - in the case specified in subparagraph 2) of paragraph 2 of this article.

Based on the results of collected information on the financial condition of the debtor, during a rehabilitation proceeding in court, the interim administrator draws up an opinion on the financial stability of the debtor, containing one of the following conclusions:

1) the debtor belongs to the I class of financial stability, the application for the rehabilitation procedure is groundless;

2) the debtor belongs to the II class of financial stability, there are grounds for the application of the rehabilitation procedure;

3) the debtor belongs to the III class of financial stability, there are grounds for declaring him/her/it bankrupt.

The opinion on the financial stability of the debtor is drawn up by the interim administrator and the interim manager with account of the provisions of Article 49-1 of this Law.

Footnote. Article 49 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 49-1. Determination of financial stability classes

The class of financial stability of the debtor is determined by calculating coefficients characterizing the effectiveness of his/her/its financial and economic activities.
In accordance with the boundaries of a financial stability class, the debtor belongs to one of the following classes: I class - financially stable; II class - associated with the risk of bankruptcy, but capable to restore financial stability; III class - financially unstable.
The procedure for calculating the coefficients and determining the boundaries of financial stability classes is established by the authorized body.

Footnote. Chapter 4 is supplemented with Article 49-1 in accordance with Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 50. Consequences of initiation of the proceeding with regard to case on rehabilitation or bankruptcy

From the date of issuance of a ruling on the initiation of rehabilitation or bankruptcy proceedings:

1) an individual entrepreneur - a debtor, owner of property, founder (participant), all bodies of a legal entity are prohibited from using and selling property outside ordinary commercial transactions;

2) the execution of earlier court judgments, arbitral awards, decisions of state revenue bodies, as well as owners (founders, participants), bodies authorized by them or bodies of the debtor in respect of his/her/its property is suspended, except for payments to citizens to whom the debtor is liable for damaging life or health without regard to claims for compensation for moral damage;

2-1) the accrual of forfeits (penalties, fines) for all types of debts of the debtor is suspended;

3) any requirements of the creditors to the debtor may be submitted only within the rehabilitation procedure or bankruptcy proceeding, with the exception of requirements on execution of the guarantees and sureties by third parties, as well as levy of execution upon a pledge subject in cases when the pledgeholder is the third parties;

4) recovery of money from banking accounts of the debtor upon demands of the creditors, body of state revenues and other authorized state body carrying estimation and (or) collection of other compulsory payments to the budget including those subjected to satisfying in indisputable (acceptance-free) manner, as well as levy of execution upon property of the debtor shall not be allowed;

5) disposal of shares, interests in charter capital of the debtor shall not prohibited.

The court, within five working days, is obliged to publish an announcement of the initiation of rehabilitation proceedings in the Kazakh and Russian languages in print periodicals distributed throughout the Republic of Kazakhstan and the relevant administrative-territorial unit at the location of the debtor entitled, in the prescribed manner, to officially publish legislative acts, and also on the court’s website.

Footnote. Article 50 as amended by the Law of the Republic of Kazakhstan dated 07.11.2014 No. 248-V (shall be enforced upon expiry of ten calendar days after the date of its first official publication); dated 08.04.2016 № 489-V (shall be enforced upon expiry of ten calendar days after the day its first official publication); dated; 02.04.2019 № 241-VІ (shall be enforced upon expiry of ten calendar days after its first official publication); № 290-VI as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 51. Ensuring of requirements of the creditors

Court shall have the right to take the following measures for ensuring requirements of the creditors upon application of the creditor, prosecutor or another person participated in a case:

1) arrest the property (part of property) belonging to the debtor, as well as money;

2) prohibit commission of actions to the debtor that may entail decrease of its property or otherwise affect interests of the creditors;

3) suspend recovery under enforcement or other documents according to which the recovery shall be made in indisputable (acceptance-free) manner;

4) other actions aimed at preserving the debtor’s property during a bankruptcy proceeding.

Footnote. Article 51 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 52. Preparation of case on rehabilitation or bankruptcy to judicial proceeding

When preparing a rehabilitation or bankruptcy case for a court hearing, in addition to the actions provided for by the legislation on civil proceedings of the Republic of Kazakhstan, the court shall notify the authorized body, the debtor, creditors, the prosecutor and other persons participating in the case, about the time and place of a court session hearing the case.
Copies of a ruling to prepare the rehabilitation or bankruptcy case for a court hearing shall be sent to the authorized body, the debtor, creditors, the prosecutor and other persons participating in the case.

Footnote. Article 52 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 53. Suspension and reopening of proceeding with regard to bankruptcy case

After receipt of application of the debtor on applying rehabilitation procedure within proceeding with regard to bankruptcy case, the court shall issue regulation on suspension of proceeding with regard to bankruptcy case no later than five business days after receipt of application with the consent of the creditor that initiated a bankruptcy case.
Copies of court regulation on suspension of proceeding with regard to bankruptcy case shall be directed by the court to the debtor, applicant, authorized body to the regional chamber of private officers of justice and territorial body of justice at location of the debtor.
Proceeding with regard to bankruptcy case that previously was suspended shall be reopened by the court in case of termination of rehabilitation procedure on the grounds provided by paragraph 6 of Article 59 and paragraphs 2, 3, 4 and 6 of Article 82 of this Law.

Footnote. Article 53 as amended by the Law of the Republic of Kazakhstan dated 29.09.2014 No. 239-V (shall be enforced upon expiry of ten calendar days after the date of its first official publication).

Article 54. Court proceeding

After preliminary preparation, the rehabilitation or bankruptcy case shall be scheduled for a court hearing, about which the court issues a ruling.

A rehabilitation or bankruptcy case shall be considered at a court session within two months of its initiation.

If the creditor who filed a bankruptcy petition fails to appear at a court session, the court shall issue a ruling to dismiss the petition.

If the debtor fails to appear at a court session, the court shall issue a ruling on compulsory process.

Footnote. Article 54 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 55. Judicial acts with regard to case on rehabilitation or bankruptcy

After consideration of case on rehabilitation or bankruptcy in judicial proceeding, the court may adopt one of the following judicial acts:

1) decision on declaring the debtor as bankrupt and its liquidation with initiation of bankruptcy proceeding;

2) is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

3) decision on refusal in declaring the debtor as bankrupt;

4) decision on applying rehabilitation procedure;

5) decision on refusal in applying rehabilitation procedure;

5-1) a ruling to revoke the decision to declare the debtor bankrupt and liquidate it with initiation of bankruptcy proceedings;

5-2) a decision to terminate bankruptcy proceedings, apply rehabilitation proceedings and approve the rehabilitation plan;

5-3) a decision to refuse to terminate bankruptcy proceedings, apply rehabilitation proceedings and approve the rehabilitation plan;

6) regulation on termination of proceeding with regard to the case;

6-1) a ruling to affirm the settlement agreement and terminate bankruptcy proceedings.

Decisions and regulation of court provided by paragraph 1 of this Article shall conform to requirements of the legislation on civil proceeding of the Republic of Kazakhstan considering special aspects provided by this Law.

Footnote. Article 55 as amended by the Law of the Republic of Kazakhstan dated 13.11.2015 № 399-V (shall be enforced upon expiry of ten calendar days after the day its first official publication); № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 56. Judgment on declaring the debtor bankrupt and its liquidation with initiation of the bankruptcy procedure

A judgment to declare the debtor bankrupt and liquidate it with the initiation of bankruptcy procedure shall be made by court with account of the opinion of the interim manager on the financial stability of the debtor specified in subparagraph 3) of paragraph 1 of Article 49 of this Law, or the act specified in subparagraph 2) of paragraph 3 of Article 49 of this Law.
The court judgment on declaring the debtor bankrupt shall indicate:

1) the liquidation of the debtor with the initiation of the bankruptcy procedure;

2) the transfer of the right to manage the debtor to the interim manager;

3) the amount of stated claims of creditors who applied to court before the judgment was made;

4) the transfer of constituent documents, seals (if any), stamps by the bankrupt’s officials to the interim manager within three working days of the court judgment on declaring the debtor bankrupt, within ten working days - accounting documents, documents of title to the property of the bankrupt, within twenty working days - material and other valuables belonging to the bankrupt;

5) the removal of all restrictions and encumbrances on the bankrupt’s property (collection orders issued to the bankrupt’s accounts, arrests on property and others) without appropriate decisions made by the bodies that imposed them, on the basis of the administrator’s application.

The interim manager sends an announcement of declaring the debtor bankrupt and its liquidation with the initiation of the bankruptcy procedure in the Kazakh and Russian languages to the authorized body, within two working days of the declaration of the debtor bankrupt, for posting it on its website.

The authorized body, within two working days of receipt of the announcement, is obliged to post it on its website in the Kazakh and Russian languages.

The publication on declaring the debtor bankrupt shall contain:

1) the name of the court that issued the judgment on declaring the debtor bankrupt and liquidating it with the initiation of the bankruptcy procedure;

2) surname, name, patronymic (if it is indicated in the identity document) or name, individual identification number or business identification number and the location of the bankrupt;

3) information on the state registration of the bankrupt.

Footnote. Article 56 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 57. Decision on declaring the debtor as bankrupt and its liquidation without initiation of bankruptcy proceeding upon application of the creditor or prosecutor

Footnote. Article 57 is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 58. Court judgment on refusal to declare the debtor bankrupt

Footnote. The heading of Article 58 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

The court makes a judgment on refusal to declare the debtor bankrupt with account of the opinion of the interim manager on the financial stability of the debtor specified in subparagraphs 1) and 2) of paragraph 1 of Article 49 of this Law, or the act specified in subparagraph 1) of paragraph 3 of Article 49 of this Law.
If the court makes a judgment to refuse to declare the debtor bankrupt with account of the opinion of the interim manager on the financial stability of the debtor specified in subparagraphs 1) and 2) of paragraph 1 of Article 49 of this Law, the debtor has the right to demand compensation from the applicant in the manner prescribed by the legislation of the Republic Kazakhstan.
Court decision on refusal in declaring the debtor as bankrupt shall not deprive the creditors of the right to represent own requirements to the debtor in the manner provided by the legislation on civil proceeding of the Republic of Kazakhstan.

Footnote. Article 58 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 59. Judgment on a rehabilitation case

The judgment on the application of the rehabilitation procedure is made by the court with account of the opinion of the interim administrator on the financial stability of the debtor specified in subparagraph 2) of paragraph 4 of Article 49 of this Law.

In the event that the interim administrator draws up an opinion on the financial stability of the debtor specified in subparagraph 3) of paragraph 4 of Article 49 of this Law, the court makes a judgment on the application of the rehabilitation procedure with the consent of the creditors’ meeting.

A court judgment on the application of the rehabilitation procedure to a debtor shall indicate:

1) the application of the rehabilitation procedure;

2) the termination of the powers of the interim administrator;

3) the management of the debtor until the approval of the rehabilitation plan by the person specified in subparagraph1) of paragraph 1 of Article 69 of this Law;

4) the debtor’s presentation of the debtor’s rehabilitation plan approved by the creditors’ meeting within three months of entry into force of the judgment on the application of the rehabilitation procedure;

5) the onset of the consequences of the application of the rehabilitation procedure provided for by this Law.

The court refuses to apply the rehabilitation procedure in cases of:

1) drawing up an opinion on the financial stability of the debtor specified in subparagraph 1) of paragraph 4 of Article 49 of this Law by the interim administrator;

2) a failure of the creditors’ meeting to approve the application of the rehabilitation procedure when the interim administrator draws up an opinion on the financial stability of the debtor specified in subparagraph 3) of paragraph 4 of Article 49 of this Law.

The court judgment on the refusal to apply the rehabilitation procedure shall indicate the creditor’s right to demand compensation for losses incurred as a result of filing an application for the rehabilitation procedure from the debtor.

Footnote. Article 59 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 59-1. Decision to terminate bankruptcy proceedings, apply rehabilitation proceedings and approve a rehabilitation plan

The court judgment to terminate the bankruptcy procedure, apply the rehabilitation procedure and approve the rehabilitation plan shall be made by court on the conditions and in the manner prescribed by Article 95-1 of this Law, taking into account the opinion of the bankruptcy manager on the financial stability of the debtor, according to which the debtor, following the results of the implementation of measures provided for by the rehabilitation plan, shall be classified as belonging to class I of financial stability.
The court decision on the termination of bankruptcy proceedings, application of rehabilitation proceedings and approval of the rehabilitation plan shall contain an order to:

1) terminate bankruptcy proceedings and execute the court decision to declare the debtor bankrupt and liquidate it with initiation of bankruptcy proceedings;

2) terminate powers of a bankruptcy manager;

3) apply rehabilitation proceedings and approve the rehabilitation plan;

4) enforce the consequences of applying rehabilitation proceedings provided for by this Law;

5) is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication);

6) the bankrupt’s transfer to a managing body or a person entrusted by the creditors’ meeting with the authority to manage the debtor in the manner prescribed by Article 69 of this Law, constituent documents, accounting documents, documents of title to property, seals (if any), stamps, material and other valuables.

The court refuses to terminate bankruptcy proceedings, apply rehabilitation proceedings and approve the rehabilitation plan in the case of:

absence of the consent of a meeting of creditors to approve the rehabilitation plan;

the debtor’s failure to prove the possibility of restoring solvency in the course of court proceedings.

Footnote. Chapter 4 is supplemented by Article 59-1 in accordance with the Law of the Republic of Kazakhstan dated 13.11.2015 № 399-V (shall be enforced upon expiry of ten calendar days after the day its first official publication); № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication);

Article 60. Court decision upon false bankruptcy

Footnote. Article 60 is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 61. Distribution of administrative expenses

When making a judgment on declaring the debtor bankrupt, applying the rehabilitation procedure, administrative expenses are charged to the debtor’s property and reimbursed at the expense of this property out of turn.
The administrative expenses specified in paragraph 1 of this article shall be paid by the applicant who has applied to the court in cases where the court makes:

1) a ruling on the termination of the rehabilitation or bankruptcy proceedings;

2) a judgment to refuse to apply the rehabilitation procedure or declare the debtor bankrupt.

In the cases specified in part one of this paragraph, when two or more creditors go to court, administrative expenses are distributed among such creditors in proportion to their claims.

Footnote. Article 61 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 62. The entry into legal force of a court decision (ruling), the review of a decision (ruling)

The entry into legal force of judicial acts specified in article 55 of this Law, their review in light of newly discovered facts, as well as their appeal (challenge), shall be carried out in accordance with the procedure provided for by the civil procedure legislation of the Republic of Kazakhstan.

Footnote. Article 62 in the new wording of the Law of the Republic of Kazakhstan dated 13.11.2015 № 399-V (shall be enforced upon expiry of ten calendar days after the day its first official publication).

Chapter 5. REHABILITATION PROCEDURE

Article 63. Application of the rehabilitation procedure

The rehabilitation procedure is applied to debtors by court.

Footnote. Article 63 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 64. Duration of the rehabilitation procedure

The term for carrying out the rehabilitation procedure is established by court when making a ruling on the approval of the rehabilitation plan and is calculated from the date of entry into force of such a ruling. The court has the right, at the request of the rehabilitation manager, with the consent of the creditors’ meeting, to extend this period once, but for no more than six months, unless otherwise provided for by this article.

With regard to organizations and individual entrepreneurs who are natural monopoly entities or are of great strategic importance for the economy of the Republic of Kazakhstan, capable of influencing the life, health of citizens, national security or the environment, as well as organizations that are town-forming legal entities, the court has the right, at the request of the rehabilitation manager with the consent of the creditors’ meeting, extend the period for carrying out the rehabilitation procedure once, but for no more than two years.

A motion to extend the term of the rehabilitation procedure shall be submitted by the rehabilitation manager twenty working days before the expiration of the term for the rehabilitation procedure.

A failure to observe the term specified in part three of this article is a ground for the court to refuse to extend the term for the rehabilitation procedure.

Footnote. Article 64 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 65. Suspension and reopening of rehabilitation procedure for participant of measures of state support

Footnote. Article 65 is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 66. Participants of rehabilitation procedure

Participants of rehabilitation procedure are:

1) court;

2) creditors;

3) debtor;

4) the owner of the property of the legal entity - the debtor (a body authorized by it), its founders (participants);

5) is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

6) rehabilitation manager;

7) authorized body;

8) other interested persons.

Footnote. Article 66 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 67. Powers of court in rehabilitation procedure

Court in rehabilitation procedure shall:

1) apply and terminate the rehabilitation procedure;

2) is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication);

3) approve rehabilitation plan;

4) approve amendments and supplements to rehabilitation plan;

5) accept cases to own proceeding on the disputes of property nature on which the debtor act as defendant;

6) is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication);

7) resolve disputes between participants of rehabilitation procedure.

Footnote. Article 67 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 68. Consequences of the application of the rehabilitation procedure

From the date of entry into force of the court judgment on the application of the rehabilitation procedure, the following consequences occur:

1) it is prohibited to make transactions with property outside ordinary commercial transactions;

2) the accrual of interest on received loans and issued bonds is terminated;

3) the execution of court judgments, arbitral awards, decisions of state revenue bodies, as well as an individual entrepreneur - a debtor, an owner of property (a body authorized by him/her/it), founders (participants in) of a legal entity - a debtor in respect of his/her/its property is suspended, except for payments to citizens to whom the debtor is liable for damaging life or health without taking into account claims for compensation for moral damage, which became due after the application of the rehabilitation procedure.

After the approval of the rehabilitation plan:

1) the debtor is managed by a person appointed by the creditors’ meeting in the manner prescribed by Article 69 of this Law;

2) transactions with property outside ordinary commercial transactions, except for those provided for by the rehabilitation plan, are made with the consent of the creditors’ meeting;

3) on the basis of the debtor’s application and a copy of the final and binding court ruling on the approval of the rehabilitation plan, restrictions and encumbrances on the debtor’s property (collection orders to the debtor’s accounts, arrests on property, etc.) are removed without relevant decisions made by the bodies that imposed them.

Footnote. Article 68 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 69. Management of the debtor under the rehabilitation procedure

Management of the debtor under the rehabilitation procedure by the decision of the creditors’ meeting shall be entitled to:

1) an individual entrepreneur - a debtor or a body or person authorized by the owner of property, founder (participant in) of a legal entity - a debtor;

2) a rehabilitation manager.

For the purposes of this Law, the management of the debtor under the rehabilitation procedure of an individual entrepreneur means the management of his/her affairs and property.

If at the first creditors’ meeting a decision is made to entrust the authority to manage the debtor to the person specified in subparagraph 2) of paragraph 1 of this article, then the first creditors’ meeting shall choose a candidate for the rehabilitation manager from among the persons whose notifications are included in the register of notifications of persons entitled to carry out the activities of an administrator.

When choosing a candidate for the rehabilitation manager, the creditors’ meeting from shall get recommendations regarding persons included in the register of notifications of persons entitled to carry out the activities of an administrator from professional associations of such persons.

The first creditors’ meeting, within three working days of selection of the rehabilitation manager, is obliged to notify such a rehabilitation manager prior to submitting his/her candidacy to the authorized body.

The interim administrator, within three working days of the decision specified in part one of this paragraph, is obliged to submit the minutes of the creditors’ meeting to the authorized body.

The authorized body, within two working days of receipt of the minutes of the creditors’ meeting, is obliged to appoint the candidate selected by the creditors’ meeting as a rehabilitation manager.

If the authorized body discovers circumstances that prevent the appointment of the candidate as a rehabilitation manager on the basis of part one of paragraph 5 of Article 12 of this Law, the authorized body, within five working days of such discovery, is obliged to send to the creditors’ meeting a reasoned refusal to appoint a candidate as a rehabilitation manager or a message on removing the notification of a rehabilitation manager from the register of notifications of persons entitled to carry out the activities of an administrator, on the basis of subparagraph 3) of paragraph 8 of Article 12 of this Law.

If the authorized body refuses to appoint the proposed candidate, the creditors’ meeting is obliged to present another candidate for appointment as a rehabilitation manager.

The creditors’ meeting in the course of the rehabilitation procedure has the right to once change the decision on the assignment of powers to manage the debtor by:

1) the dismissal of an individual entrepreneur - a debtor or a body or person authorized by the owner of the property, founder (participant in) of the legal entity - the debtor, from exercising the powers to manage the debtor with the imposition of such powers on the rehabilitation manager;

2) the removal of the rehabilitation manager from exercising the powers to manage the debtor with the imposition of such powers on the individual entrepreneur - the debtor or the body or person authorized by the owner of the property, founder (participant in) of the legal entity - the debtor.

When the creditors’ meeting adopts a decision specified in subparagraph 1) of part one of this paragraph, the creditors’ meeting, in the manner prescribed by paragraph 2 of this article, selects the candidate for the rehabilitation manager.

The creditors’ committee, within three working days of the decision specified in part one of this paragraph, is obliged to submit the minutes of the creditors’ meeting to the authorized body.

When the agenda of the creditors’ meeting includes the issue of dismissing the rehabilitation manager from exercising the powers to manage the debtor with the imposition of such powers on the individual entrepreneur - the debtor or the body or person authorized by the owner of the property, founder (participant in) of the legal entity - the debtor, the creditors’ committee, ten working days before the creditors’ meeting, notifies the individual entrepreneur - the debtor, the owner of the property (the body authorized by him/her/it), the founder (participant in) of the legal entity - the debtor about the consideration of such an issue.

If the creditors’ meeting makes a decision specified in subparagraph 2) of part one of paragraph 3 of this article, the owner of the property (the body authorized by him/her/it) or the founder (participant in) of the legal entity - the debtor is obliged to submit documents on the body or person entrusted with the authority to manage the debtor within two working days of the creditors’ meeting.

Footnote. Article 69 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 70. Powers of a temporary administrator

The interim administrator has the right to request documents confirming the ground for and amount of the stated claims from creditors.
Temporary administrator shall be obliged to:

1) collect information on the financial condition of the debtor on the basis of accounting documents and financial statements in order to draw up an opinion on financial stability;

2) submit an opinion on the financial stability of the debtor in accordance with the standard form to court;

      3) is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication);
      4) is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication);
      5) is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication);

6) notify all creditors of the place and date of the first creditors’ meeting;

7) is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication);

7-1) organize and hold the first creditors’ meeting;

8) exercise other powers in accordance with this Law and the legislation of the Republic of Kazakhstan.

Footnote. Article 70 as amended by the Law of the Republic of Kazakhstan dated 13.11.2015 № 399-V (shall be enforced upon expiry of ten calendar days after the day its first official publication); № 290-VI as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 71. Powers of the rehabilitation manager

The rehabilitation manager has the right to:

1) request and receive information on the debtor from organizations, state bodies and their officials;

2) make transactions outside ordinary commercial transactions with the consent of the creditors’ meeting;

3) with the consent of the creditors’ meeting, make decisions that entail an increase in the debtor’s expenses, including for the remuneration of the debtor’s employees;

4) request from creditors documents confirming the ground for and amount of the stated claims;

5) participate in relations regulated by the legislation of the Republic of Kazakhstan on rehabilitation and bankruptcy, using the information system;

6) appeal against actions of the creditors’ meeting and the creditors’ committee, the authorized body in the manner prescribed by the legislation of the Republic of Kazakhstan.

From the date of appointment of the rehabilitation manager and until the entry into force of a court ruling on the approval of the rehabilitation plan, the rehabilitation manager is obliged to:

1) keep a register of creditors’ claims;

2) perform the actions established by paragraph 1 of Article 25 of this Law;

3) file an application for terminating the rehabilitation procedure with court within three working days of occurrence of one of the grounds specified in paragraph 2 of Article 82 of this Law;

4) fulfill other obligations provided for by this Law and the legislation of the Republic of Kazakhstan.

After a court ruling on the approval of the rehabilitation plan becomes final and binding, the rehabilitation manager is obliged to:

1) take the debtor’s property into management and ensure its protection and control over it;

2) ensure the implementation of the rehabilitation plan;

3) keep a register of creditors’ claims;

4) submit a motion to the court for amendments and additions to the rehabilitation plan within five working days of their approval by the creditors’ meeting;

5) send a notification to the members of the creditors’ committee in the manner and within the time frame established by paragraph 4 of Article 27 of this Law;

6) perform the actions established by paragraph 1 of Article 25 of this Law;

7) identify transactions made by the debtor or a person authorized by him/her/it under the circumstances specified in Article 7 of this Law, and to submit claims for their invalidation or the return of property in court, including at the request of the creditor who identified such a transaction;

8) on or before the 15th day of each month, bring information on the financial condition, transactions made in a previous month to the attention of the members of the creditors’ committee, provide any information at the request of the creditors’ committee;

9) provide the authorized body with current and requested information on the progress of the rehabilitation procedure in the form, in the manner and within the time frame established by the authorized body;

10) provide full information on the progress of its activities, the financial condition of the debtor to any creditor of the debtor pursuant to his/her written request within ten working days of its receipt;

11) identify the facts of illegal actions during rehabilitation in cases where the debtor was previously managed under the rehabilitation procedure by an individual entrepreneur - a debtor, or by a body or person authorized by the owner of property, a founder (participant in) of a legal entity - a debtor, or a dismissed rehabilitation manager;

12) in the event of the dismissal (termination) of the rehabilitation manager, transfer to the newly appointed rehabilitation manager, within three working days of appointment of the latter, constituent documents, accounting documents, documents of title to the debtor’s property, seals (if any), stamps, material and other valuables belonging to the debtor;

13) file an application for terminating the rehabilitation procedure with court in the cases and in the manner prescribed by paragraph 1 of Article 82, paragraph 2 of Article 83 of this Law;

14) if the court decides to terminate the rehabilitation procedure, declare the debtor bankrupt and liquidate it with the initiation of the bankruptcy procedure, transfer the constituent documents, seals (if any), stamps to the bankruptcy manager within three working days of his/her appointment, accounting documentation - within three working days, material and other valuables belonging to the bankrupt - within twenty working days;

15) fulfill other obligations provided for by this Law and the legislation of the Republic of Kazakhstan.

If the total amount of the debtor’s financial obligations arising after the application of the rehabilitation procedure exceeds five percent of the total amount of accounts payable as at the date of the court’s judgment to apply the rehabilitation procedure, each subsequent transaction entailing the emergence of new financial obligations of the debtor is made by the rehabilitation manager with the consent of the creditors’ meeting.

Footnote. Article 71 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 72. Formation of the register of creditors’ claims in the course of the rehabilitation procedure

The interim administrator sends an announcement of the initiation of a rehabilitation proceeding and procedure for filing claims by creditors to the authorized body for posting it on its website in the Kazakh and Russian languages within two working days of initiation of the rehabilitation proceeding.

Creditors’ claims are accepted by the interim administrator at the location of the debtor or at the place of registration of the administrator indicated by him/her in the notification about the commencement of his/her activity as an administrator.

The authorized body within two working days of receipt of the announcement is obliged to post it on its website.

If the debtor has a website, it is mandatory to publish the message there.

Creditors’ claims against the debtor shall be declared by them within one month of publication of the announcement of the procedure for filing claims by creditors.

Creditors’ claims shall contain:

1) information on the amount of the claim (separately on the amount of the principal debt, remuneration (interest), forfeit and other penalties, losses). The amount of the claim is determined as at the date of statement of the specified claim

2) an indication of one of the methods of notification of the creditors’ meeting specified in paragraph 1 of Article 25 of this Law.

The claim is submitted together with copies of documents confirming a ground for and amount of the claim (final and binding court judgments, copies of contracts, recognition of the debt by the debtor), with the presentation of original documents for verification.

Creditors are also entitled to submit other documents confirming the ground for and amount of the claim.

If the amount of the claim for remuneration (interest) and losses specified in subparagraph 1) of part two of this paragraph is changed as at the date of a court judgment on the application of the rehabilitation procedure, the creditor, within ten working days of this court judgment, re-declares his/her claims with account of this change.

Creditors’ claims denominated in foreign currency are accounted for in tenge at the official exchange rate established by the National Bank of the Republic of Kazakhstan as at the date of the court judgment on the application of the rehabilitation procedure.

The creditor’s claim, declared after the time frame specified in paragraph 2 of this article, is included in the register of creditors’ claims, but such a creditor is deprived of the right to vote at the creditors’ meeting until the creditors’ claims declared within a month are fully satisfied.
Creditors’ claims shall be considered by the interim administrator or rehabilitation manager within ten working days of their submission.

Based on the results of consideration, the recognized claims are subject to inclusion in the register of creditors’ claims.

The register may include the claims of creditors, which they previously declared in court, if they meet the requirements specified in part two of paragraph 2 of this article, given an application from the creditor.

The register of creditors’ claims does not include the claims specified in paragraph 7 of Article 90 of this Law.

The expenses of creditors related to their participation in the rehabilitation procedure shall not be reimbursed.
The interim administrator is obliged to notify each creditor in writing of the results of consideration of creditors’ claims (of the recognition or non-recognition of the claim in full or in part, indicating reasons for non-recognition) on the day following the day of the decision.

In the notification about recognition of the creditor’s claim (in full or in part), the interim administrator shall indicate the date, time, place and agenda of the first creditors’ meeting.

In case of disagreement with the decision of the interim administrator, the creditor has the right to appeal it to the court considering the rehabilitation case within ten working days of receipt of the notification from the interim administrator.

The interim administrator is obliged, within two months of his/her appointment, to form the register of creditors’ claims, and also the list of creditors with unrecognized claims, in the manner, within the time frame and in the form established by the authorized body and send them to the authorized body in the Kazakh and Russian languages for posting on its website.

The authorized body, within two working days of receipt of the register of creditors’ claims from the interim administrator, is obliged to post it on its website.

Changes and additions to the formed register of creditors’ claims are made in the manner determined by the authorized body.

The creditor has the right to appeal the size of and grounds for claims of other creditors within twenty working days of publication of the register of creditors’ claims.

Footnote. Article 72 is as amended by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).

Article 73. Rehabilitation plan and procedure for its approval

The rehabilitation plan shall contain specific measures to restore the debtor’s solvency (rehabilitation measures) and the schedule for meeting the creditors’ claims specified in paragraph 2 of Article 77 of this Law.

The standard form of the rehabilitation plan is approved by the authorized body.

The plan for the rehabilitation of organizations and individual entrepreneurs that are natural monopoly entities or are of great strategic importance for the economy of the Republic of Kazakhstan, capable of influencing the life, health of citizens, national security or the environment, shall be approve by the relevant central executive body, the relevant territorial body of the National Security Committee of the Republic Kazakhstan, and that for town-forming legal entities - with the relevant local executive body of a region, city of republican significance and the capital.

The submitted rehabilitation plan shall be considered by the approving state bodies specified in part three of this paragraph within ten working days of its receipt.

The rehabilitation plan shall be developed by the debtor together with the creditors and the rehabilitation manager within three months of entry into force of the judgment on the application of the rehabilitation procedure.

The developed rehabilitation plan shall provide for equal conditions for satisfying the claims of creditors of the same priority.

Term of realizing rehabilitation plan shall not exceed five years.
Rehabilitation measures may include any organizational and economic, technical, financial and economic, legal and other measures that are not inconsistent with the legislation of the Republic of Kazakhstan, aimed at restoring the debtor’s solvency, including reorganization, sale of property through an electronic auction, financial lease, assignment of the debtor’s rights of claims, factoring, reverse factoring, forgiving part of the debt, writing off penalties and fines, exchanging debts for shares, concluding an amicable agreement, etc.
If the rehabilitation plan indicates the obtaining of loans (microcredits) as a source of money, it is necessary to attach an agreement on obtaining a loan (microcredit) to the rehabilitation plan.
Is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).
7. Is excluded by Law № 290-VI of the Republic of Kazakhstan as of 27.12.2019 (shall be enforced ten calendar days after its first official publication).
A rehabilitation plan for organizations that are natural monopoly entities or have significant strategic importance for the economy of the Republic of Kazakhstan, capable of influencing the life, health of citizens, national security or the environment, shall be coordinated with the relevant central executive body, relevant territorial body of the National Security Committee of the Republic of Kazakhstan, and for city-forming legal entities - with the relevant local executive body of a region, city of republican significance and the capital.

Represented rehabilitation plan shall be considered within ten business days.

After the rehabilitation plan is approved by the creditors’ meeting, the debtor is obliged to submit it to court within the time frame established by subparagraph 4) of paragraph 2 of Article 59 of this Law.
Rehabilitation plan coordinated with the creditors’ meeting shall be approved by the court regulation within seven business days from the date of its representation.
The court refuses to approve the rehabilitation plan in the following cases:

1) if the creditor who voted against the rehabilitation plan provides the court with justification that the rehabilitation plan contains measures, the implementation of which will entail the satisfaction of the claim of such a creditor to a lesser extent than in case of the bankruptcy procedure;

2) non-compliance with the requirements of Article 26-1 of this Law.

Дата публикации

07 марта 2014