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Article 52. Bankruptcy

[replaced 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 amended by

(14) Law No. of 29th June 1998 of the Republic of Kazakhstan. Concerning the Introduction of Amendments to the Civil Code of the Republic of Kazakhstan (General Part)].

Bankruptcy - the insolvency of a debtor as recognised by a court decision, which is the basis for the liquidation of a debtor.

Insolvency is understood to be incapacity of a debtor which is an individual entrepreneur or a legal entity to satisfy claims of creditors with regard to monetary obligations, to carry out settlements with regard to work remuneration of persons who work under work agreements, and also incapacity to provide obligatory payments to the Budget and non-budgetary funds.

Article 53. The Bases of Bankruptcy Recognition of Bankruptcy

[replaced 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 amended by

(14) Law No. of 29th June 1998 of the Republic of Kazakhstan. Concerning the Introduction of Amendments to the Civil Code of the Republic of Kazakhstan (General Part)].

1. Recognition of bankruptcy is possible in a voluntary or compulsory procedure.

2. Recognition of bankruptcy in a voluntary procedure shall be carried out on the basis of the debtor's application to the court.

3. Recognition of bankruptcy in a compulsory procedure shall be carried out on the basis of the creditor application to the court, and in the cases provided for by legislative acts, also applications from other entities.

Article 54. Reorganisation Procedures in the Bankruptcy Cases The

Rehabilitation Procedure In Bankruptcy Cases

[replaced 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].

Any measures aimed at the restoration of the debtor's solvency for the purpose of preventing the liquidation, which do not contradict legislation, may be applied to an insolvent debtor.

Said measures shall be implemented within the framework of a rehabilitation procedure, of which the order and the period of performance shall be defined in legislation concerning bankruptcy.

Article 55. The Consequences of Instituting the Liquidation

Competitive Proceedings

as amended by (11) Law of 11th July 1997 of the Republic of Kazakhstan. Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan Concerning Issues of Banking Activity; and

(14) Law No. of 29th June 1998 of the Republic of Kazakhstan. Concerning the Introduction of Amendments to the Civil Code of the Republic of Kazakhstan (General Part)].

1. From the moment of instituting the liquidation competitive proceedings:

1) the insolvent debtor shall be prohibited to alienate assets (except for the cases where the permission to alienate is granted by the meeting of the creditors), to transfer assets or to repay debts;

2) deadlines of all debt obligations of an insolvent debtor shall be deemed to have expired;

3) the assessment of penalties and percentage damages and remuneration (interest) shall terminate with regard to any debts of an insolvent debtor;

4) all legislative restrictions regarding the imposition of claims on the property of an insolvent debtor shall be alleviated;

5) the disputes of property nature with the participation of the insolvent debtor which are considered by the court, shall be terminated, provided the decisions adopted in relation to them have not entered into the legal force.

2. Any requirements of the property nature from that moment may be presented to the debtor only within the framework of the liquidation competitive proceedings.

Article 56. Release of an Insolvent Debtor from Debts

replaced by (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)".

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