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Article 51. Satisfying the Claims of Creditors

[as amended by (6) Law No. 68-I of the Republic of Kazakhstan. Concerning the Recognition as Invalid of the Edict of the President of the Republic of Kazakhstan, Having the Force of a Law "Concerning Bankruptcy" and Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan. January 21, 1997; and

(12) Law of No. 211 of 2nd March 1998 of the Republic of Kazakhstan. Concerning the Introduction of Amendments and Additions to the Civil Code of the Republic of Kazakhstan (General Part), and to the Decree of the Supreme Soviet of the Republic of Kazakhstan "Concerning the Implementation of the Civil Code of the Republic of Kazakhstan (General Part)".

1. When liquidating a legal entity, the claims of its creditors shall be satisfied in the following sequence:

1) in the first turn, the claims of citizens to whom the enterprise in liquidation bears the liability for causing harm to life and health, by way of capitalising appropriate periodic payments;

2) the claims of creditors with regard to obligations secured with pledge of property of the bankrupt in liquidation shall be satisfied within the confines of pledged amounts, in the second line;

3) settlements with regard to work remuneration with persons who work under work agreements, and settlements under authorship agreement shall be carried out in the third line;

4) in the fourth turn, the debt shall be repaid on the compulsory payments to the Budget and to the non-budgetary funds.

5) in the fifth turn, settlements shall be conducted with any other creditors in accordance with legislative acts.

2. The claims of each turn shall be satisfied upon the complete satisfaction of the claims of the previous turn.

3. When assets of a legal entity in liquidation are not sufficient, they shall be distributed among the creditors of each relevant turn in proportion to the amounts of claims which are subject to satisfaction, unless otherwise is provided for by law.

4. In the case of the refusal of the liquidation commission to satisfy the claims of a creditor or of an evasion from consideration, the creditor shall have the right, prior to the approval of the liquidation balance-sheet of a legal entity, to appeal to the court with the action against the liquidation commission. Upon the decision of the court, the claims of the creditor may be satisfied at the expense of the remaining assets of the legal entity in liquidation.

5. The assets which remain upon the satisfaction of the claims of creditors of the legal entity, shall be transferred to its owner or the foundation parties (participants) which have corporeal rights to those assets or any obligatory rights to the legal entity, unless otherwise provided for by legislation or the foundation documents of the legal entity.

6. The claims of creditors which are not satisfied because of a shortfall of assets of the legal entity in liquidation and also those which are not claimed before the approval of the liquidation balance-sheet shall be deemed to be satisfied.

Also the claims of creditors which are not recognised by the liquidation commission shall be deemed to be cancelled, unless the creditor appeals to the court with the action, as well as the claims the satisfaction of which was denied to the creditors by the court.

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