Once proceedings have been opened, the way creditors can pursue claims against the company changes. Enforcement proceedings and insolvency-related litigation may be covered by the moratorium and thereby brought within the collective proceedings. However, this protection does not extinguish the underlying claims. It is therefore necessary to determine, for each enforcement action, court proceeding and other individual measure, whether and to what extent it may continue. At the same time, all company assets must be identified, documented and legally assigned to the proceedings. This requires determining which assets form part of the insolvency estate and who is authorized to dispose of them. Obligations arising during the proceedings must also be recorded. New obligations of the estate must be distinguished from older company debts because they may be treated differently in the proceedings. The accounting records, inventory of assets and claim documents should clearly reflect this temporal and legal distinction. The moratorium and the allocation of assets thus ensure the collective handling of claims and assets in accordance with the requirements of the opened proceedings.
Effects of Opening Corporate Insolvency Proceedings on a Company in Georgia
When corporate insolvency proceedings are opened in Georgia, creditors’ individual enforcement of claims and the handling of company assets become subject to the rules of the collective proceedings. A moratorium may restrict certain individual measures, while all assets must be identified and assigned to the insolvency estate.
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Once proceedings are opened, creditor measures and dispositions of assets become subject to the collective proceedings. Claims remain in existence even if a moratorium restricts their individual enforcement. From the effective date onward, assets and new obligations must be reorganized and documented.