External management as an integral part of the bankruptcy procedure
Elimination of the enterprise is considered an extreme step,used when full bankruptcy, when there is nothing to help. However, before this, various measures are being taken to restore the solvency of the organization. Such measures include external management.
The decision to begin this procedure is takenarbitration court on the basis of a petition filed by the creditors of the organization. Also, the court appoints an external manager, who is responsible not only for fulfilling obligations to creditors, but also for restoring solvency. As a rule, the maximum period during which external management is carried out is one and a half years. Then the responsible person provides a detailed report on the work performed, on the basis of which a decision is made either to extend the management, or to proceed to the next stage of the bankruptcy procedure. The initiator of this process can be the direct owner of the enterprise, directly declaring to the court that there are serious financial problems.
When external control startsbankruptcy, the head of the company is removed from office, and all powers are transferred to the appointed manager. He has the right to carry out restructuring of the enterprise, re-profiling and modernization. In addition, it can significantly reduce the staff, if it does not contradict the labor code. The manager has the right to be aware of the changes. All measures developed by the interim manager must meet the main objectives: meeting the requirements of counterparties and preventing the complete destruction of the firm. In the first place, the collection of accounts receivable in full is carried out, then debts of increased importance are paid.
In addition, external management impliesregulation of the authorized capital of the company. For example, you can increase it by raising the par value of each stock or their number. Appointed to the position of the person at his own discretion determines the procedure for the return of funds to creditors, holds a meeting of the directors of the enterprise and proposes developed measures to improve the financial condition of the firm.
In addition, the manager is responsible forthe implementation of core activities, that is, it has the parallel right to enter into agreements with suppliers and contractors and continue to produce products or provide services. A month after the arbitration department appointed its person to the position of the head, the responsible person is obliged to provide a report on the planned innovations and results. In this document it is necessary to designate the time period after which, with the positive influence of all factors, the enterprise can be considered restored.
External management can be terminated either by a court decision when the bankruptcy commissioner is introduced, or at the conclusion of a peace agreement.