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Sorainen Guides Lithuanian Court of Appeal to Significant Bankruptcy Ruling

Sorainen Guides Lithuanian Court of Appeal to Significant Bankruptcy Ruling

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Sorainen, representing Klaipedos Administratoriai, has persuaded the Lithuanian Court of Appeal to rule that a minor creditor cannot initiate the removal of a bankruptcy administrator.

According to Sorainen, in 2012 the Lithuanian Enterprise Bankruptcy Law established the right for a creditor or creditors to petition the court for removal of a bankruptcy administrator if the court-approved creditor’s claim amounts to more than half of the total amount of the creditors’ claims. In the case at hand, the firm reports, the Lithuanian Court of Appeal found that a creditor seeking to remove Klaipedos Administratoriai did not have the right to apply for the administrator’s removal because its claim was less than the minimum amount set by law. According to Sorainen, the newly-created case law "states that a minor creditor cannot initiate removal of bankruptcy administrator."

According to Sorainen, "the Lithuanian Court of Appeal found that an individual creditor whose claim is less than half the amount of claims approved by the court may not initiate court proceedings for removal of the insolvency administrator for improper performance of duties. Moreover, the court found that if information about the activities of a bankruptcy administrator is submitted by a minor creditor, the court cannot assess it and must terminate proceedings for removal of the bankruptcy administrator."

The Sorainen team consisted of Partner Kestutis Svirinas, Senior Associate Kazimieras Karpickis, and Associate Ausra Gauryte.

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