Date of publication: 21 August 2026
Vadym Kizlenko, Attorney at Law, Counsel, Insolvency Receiver, Co-Head of Insolvency and Financial Restructuring at Ilyashev & Partners Law Firm
Source: Legal 500
Unlike many jurisdictions, Ukrainian insolvency legislation does not impose strict eligibility thresholds for commencing insolvency proceedings. Neither a minimum debt amount nor a prior court judgment confirming the debt is required before a creditor may file an insolvency petition.
As a result, any company doing business in Ukraine should recognise that its counterparty may enter insolvency proceedings at virtually any time. Once insolvency proceedings are opened, one of the most significant consequences for creditors is that individual debt enforcement is generally suspended. Instead, claims may only be satisfied within the collective insolvency process, which often lasts for several years.
Understanding how Ukrainian insolvency proceedings operate – and acting promptly – is therefore critical for protecting a creditor’s commercial interests.
Mistake #1. Waiting Too Long to Initiate Insolvency Proceedings
Ukrainian legislation does not establish strict requirements for initiating insolvency proceedings. Neither a minimum amount of debt nor its confirmation by a court judgment is required. It is important to understand that your counterparty may become subject to court-supervised insolvency proceedings at any time. One of the most significant adverse consequences for a creditor is the inability to enforce the debt through compulsory execution. Repayment of the debt becomes possible only within the insolvency proceedings, which may last for years.
In the context of commencing insolvency proceedings, several important aspects should be taken into account.
First, creditors should not delay initiating insolvency proceedings. The initiating creditor has the right to propose a candidate for appointment as the insolvency trustee (property administrator) to the court. This is important because the extent to which creditors’ claims are ultimately satisfied directly depends on the quality of the property administrator’s work, including conducting a financial analysis of the debtor, reviewing creditors’ claims, and taking measures aimed at recovering the debtor’s assets that were transferred out of its possession during the statutory “suspect period”.
Therefore, if your counterparty fails to perform its obligations and does not provide clear and reliable assurances that they will be fulfilled, you should seriously consider initiating insolvency proceedings against it. While you are waiting, your debtor may be preparing for a friendly insolvency proceeding by transferring assets, creating artificial indebtedness in favour of affiliated creditors, and taking other similar actions.
In my opinion, if a creditor wishes to maximise its chances of recovering the debt, it must act promptly. Insolvency proceedings should come as a “cold shower” to the debtor. If the debtor acts first and initiates insolvency proceedings that it effectively controls, those proceedings may become a “warm bath” for the debtor, making it significantly more difficult for a bona fide creditor to obtain repayment of its claim.
It should also be noted that, in practice, there are numerous cases where a debtor, upon learning that a creditor has filed an application to commence insolvency proceedings, repays the debt in full, recognising the negative consequences of insolvency. Alternatively, the debtor may agree to restructure the debt under clear repayment terms supported by specific guarantees and deadlines for performance.
Mistake #2. Missing the Deadline for Filing Creditors’ Claims
Сreditors should monitor information regarding the insolvency of their counterparties to ensure that they do not miss the deadline for filing their monetary claims.
Under the current legislation, creditors must file their monetary claims against the debtor within 30 days from the date of publication of the official announcement on the commencement of the insolvency proceedings.
In its Resolution in case No. 910/8404/15-г dated 11 February 2026, the Supreme Court held that this time limit is mandatory and cannot be restored. Creditors’ claims filed after the expiry of the statutory deadline are satisfied in the order of priority established by the Code of Ukraine on Bankruptcy Procedures. Creditors whose claims are filed after the expiry of the time limit established by the first paragraph of this Article remain unsecured insolvency creditors; however, they do not have the right to vote at creditors’ meetings or on the creditors’ committee.
Accordingly, it is important to understand that if this deadline is missed, the creditor loses its voting rights in the representative bodies of the insolvency proceedings (the creditors’ meeting and the creditors’ committee) and, consequently, loses the ability to exercise any meaningful influence over key decisions made during the insolvency proceedings.
Mistake #3. Failing to Properly Substantiate Creditors’ Claims
No less important than filing a statement of monetary claims within the statutory time limit is the proper preparation of such statement and its supporting documents.
According to established case law, creditors in insolvency proceedings are subject to a heightened standard of proof, the essence of which is as follows:
- the court examines the validity and amount of creditors’ claims irrespective of whether there are any disputes regarding such claims between the debtor and the persons entitled to raise objections, on the one hand, and the creditor asserting the monetary claims, on the other;
- when recognising creditors’ claims in insolvency proceedings, only those claims that are supported by sufficient evidence proving both the existence and the amount of the indebtedness may be recognised;
- during the examination of a creditor’s statement of monetary claims in insolvency proceedings, the debtor’s or the insolvency trustee’s acknowledgement of the circumstances on which the creditor bases its claims does not, in itself, relieve the creditor of the obligation to prove those circumstances in accordance with the general rules of evidence.
Accordingly, a creditor should carefully prepare its statement of monetary claims and attach proper and admissible evidence confirming the existence of the debt. Even if you possess documents evidencing the debtor’s acknowledgement of the debt, you must still provide the court with all primary documents confirming both the existence and the amount of the indebtedness, including contracts, payment orders, certificates of completion, transport documents, and other relevant supporting documentation.
In its Resolution No. 902/122/25 dated 6 May 2026, the Supreme Court stated that a systematic analysis of the relevant legislative provisions demonstrates that, in insolvency proceedings, the burden of proving the validity of a creditor’s claims by appropriate evidence rests with the creditor filing the monetary claims. The subject matter of the court’s examination is whether those claims have been duly documented by the applicant creditor. The heightened standard of proof established by the legislature means that, where the creditor fails to provide the complete set of documents required to substantiate its claims, the court may refuse to recognise those claims and include them in the register of creditors’ claims. The evidence submitted by the creditor must satisfy the requirements of relevance, admissibility, credibility, and probative value set out in Articles 76-79 of the Commercial Procedure Code of Ukraine.
Furthermore, all evidence submitted to the court must be duly certified and, subsequently, the original documents must be produced for the court’s examination. The Supreme Court emphasised in its Resolution No. 910/628/20 dated 17 March 2025 that the court’s examination of the original documents attached to a creditor’s statement of monetary claims is one of the decisive factors in determining whether such claims should be recognised.
Mistake #4. Overlooking the Governing Law of the Contract
When preparing a statement of monetary claims, particular attention should be paid to the substantive law governing the contract. As a rule, contracts concluded with non-residents of Ukraine are governed by the laws of a foreign jurisdiction. In such cases, the creditor should ensure in advance that it obtains a legal opinion from an expert qualified in the law of the country whose substantive law governs the contract.
According to established case law (the Supreme Court’s Resolution No. 501/1350/17 dated 19 May 2021 and the Grand Chamber of the Supreme Court’s Resolution No. 904/2104/19 dated 16 November 2021), determining the content of the foreign law applicable to legal relationships involving a foreign element is the statutory obligation of the court hearing the case and must be carried out ex officio. At the same time, the parties to the proceedings who seek the application of the law of a particular foreign state are entitled to assist the court in establishing the content of such foreign law by submitting documents confirming the content of the relevant legal provisions on which they rely in support of their claims or objections.
For this purpose, the court may obtain information on foreign law through the following means:
- Independently determining the content of foreign law;
- Relying on expert legal opinions;
- Obtaining information through diplomatic channels;
- Submitting an official request through the Ministry of Justice of Ukraine;
- Obtaining information through international legal assistance mechanisms;
- Exchanging legal information with competent authorities;
- Direct communication between courts of different states and other competent authorities; and
- Information on foreign law submitted by the parties themselves.
Pursuant to the Law of Ukraine “On Private International Law”, where a legal relationship is governed by the law of a foreign state, a Ukrainian court must apply the substantive (rather than procedural) law of that foreign jurisdiction. This should be taken into account when preparing both the statement of monetary claims and the legal opinion on the foreign law governing the contract.
Building an Effective Strategy for Foreign Creditors in Ukrainian Insolvency Proceedings
Foreign creditors should understand that Ukrainian insolvency proceedings have their own specific features and peculiarities. Timely filing of monetary claims, supported by proper and admissible evidence, is only the first step. Creditors should also develop a comprehensive strategy for protecting their rights throughout the insolvency proceedings.
Such a strategy depends on a number of factors, including the amount of the creditor’s claim in comparison with the claims of other creditors, the existence of the debtor’s assets (including any assets transferred during the three years preceding the commencement of the insolvency proceedings), whether the debtor continues to conduct business activities, and the availability of assets belonging to the debtor’s directors, officers, and shareholders that may potentially be subject to subsidiary liability.
The effectiveness of insolvency proceedings largely depends on the creditor’s own conduct. A passive creditor is significantly less likely to achieve recovery of its claim than a creditor that actively participates in the proceedings by monitoring the insolvency trustee’s actions, analysing the debtor’s financial position, challenging suspicious transactions entered into by the debtor, contesting the claims of affiliated (“friendly”) creditors, and seeking to impose subsidiary liability on the debtor’s directors and shareholders where the statutory grounds exist.
In light of the above, foreign creditors seeking to protect their interests effectively in the insolvency of Ukrainian debtors should engage experienced legal counsel with a thorough understanding of Ukrainian insolvency law and the practical aspects of protecting creditors’ rights.
