Prerequisite for closing bankruptcy proceedings regardless of grounds: court review of the insolvency receiver's report and decision on his remuneration and expense reimbursement - SC CommCC Judicial Chamber

Closing of bankruptcy proceedings due to the satisfaction of creditors' claims (Clause 5, Part 1, Article 90 of the Code of Ukraine on Bankruptcy Procedures, as amended by the Law of Ukraine dated March 20, 2023 No. 2971-IX “On Amendments to Certain Legislative Acts of Ukraine”, which entered into force on April 15, 2023) is possible at any stage of the proceedings. However, a mandatory condition is the payment of remuneration to the insolvency practitioner. The court must approve the practitioner's report, indicating the sources of funding, while assessing not the duration of the procedure but the actual scope and validity of the work performed.

This conclusion was reached by the Supreme Court, in the panel of judges of the Judicial Chamber for the Consideration of Bankruptcy Cases of the Commercial Cassation Court of the Supreme Court.

In the case under review, despite the satisfaction of creditors' claims, the court of first instance refused to close the bankruptcy proceedings because the liquidator had not received reimbursement of expenses and court disputes were still ongoing. The appellate court overturned the challenged decision and closed the proceedings, stating that, provided creditors' claims are satisfied, the provisions of Part 7 of Article 41 and Clause 5, Part 1 of Article 90 of the Code of Ukraine on Bankruptcy Procedures are imperative. Their application is mandatory regardless of accompanying circumstances: the presence of unresolved applications or complaints, appeals against documents in higher courts, decisions by creditors to extend the procedure, or debts owed to the insolvency practitioner.

The Judicial Chamber of the Commercial Cassation Court of the Supreme Court overturned the appellate court's ruling on closing the bankruptcy proceedings, finding it inconsistent with the norms of Article 236 of the Commercial Procedural Code of Ukraine, and upheld the decision of the court of first instance for the reasons set out in its own ruling. The Judicial Chamber of the Commercial Cassation Court of the Supreme Court reached the following legal conclusions.

Analysis of Article 90 of the Code of Ukraine on Bankruptcy Procedures (as amended by the Law of Ukraine dated March 20, 2023 No. 2971-IX, which entered into force on April 15, 2023) indicates the possibility of closing bankruptcy proceedings due to the satisfaction of creditors' claims (Clause 5, Part 1 of this Article) at any stage, even during the liquidation procedure of a legal entity or the debt repayment procedure of an individual. However, the established procedure does not regulate the issue of the insolvency practitioner's services upon closure of the proceedings. To eliminate this gap, the Judicial Chamber has formed a unified legal position based on constitutional guarantees of paid labour.

The Judicial Chamber concluded that the exercise of powers by an insolvency practitioner is exclusively a paid activity, guaranteed by the Constitution of Ukraine and the norms of the Code of Ukraine on Bankruptcy Procedures.

The review of the report on the insolvency practitioner’s remuneration and expenses is a mandatory prerequisite for the completion of the case. This does not violate the imperative nature of the rules on closing the proceedings, but rather constitutes an integral part thereof.

The Judicial Chamber emphasized that the sources of funding for the insolvency practitioner’s work are determined depending on the grounds for closing the proceedings. If the proceedings are closed due to the liquidation of the debtor in the absence of assets, the expenses are borne by the creditors in proportion to their claims. In the case of closing the proceedings due to the full satisfaction of debts in accordance with the creditors’ register, the obligation to pay the remuneration rests directly with the debtor whose solvency has been restored.

The Judicial Chamber drew attention to the fact that the key aspect of judicial control when approving the report is the principle of substantiation. What is subject to payment is not the calendar time the insolvency practitioner spent in office, but the actual scope of work performed. The court must assess the reality of the actions taken and the expediency of the time spent on them, which ensures compliance with the principles of the rule of law and procedural economy. This approach creates a balanced mechanism for protecting the professional rights of the insolvency practitioner while preventing the unjustified burdening of the parties to the bankruptcy proceedings.

Resolution of the Judicial Chamber of the Commercial Cassation Court of the Supreme Court dated January 21, 2026, in case No. 927/149/22 — https://reyestr.court.gov.ua/Review/133719419.

This and other legal positions of the Supreme Court can be found in the Database of Legal Positions of the Supreme Court - https://lpd.court.gov.ua.