Abuse of commencement of insolvency (bankruptcy) proceedings: concept, features and legal nature
Year: 2026
Type: article
Abstract: The article provides a comprehensive analysis of the abuse of commencement of insolvency (bankruptcy) proceedings as an autonomous form of abuse of rights arising at the stage of access to insolvency procedures. An authorial definition of this economic and legal phenomenon is proposed, according to which such abuse consists in filing an application or undertaking related procedural actions in the absence of the grounds prescribed by the Code of Ukraine on Bankruptcy Procedures (CUBP) or under conditions of their artificial creation, as well as in the use of procedural rights contrary to their purpose with the aim of obtaining an undue procedural or economic advantage or causing harm to the parties to the proceedings. A system of criteria for identifying such abuse (objective, subjective and functional) is substantiated, and a distinction is drawn between abusive and bona fide initiation of insolvency proceedings. It is demonstrated that abuse of the commencement of proceedings is characterized by a structural mismatch between the formal legal grounds for filing an application and the actual economic condition of the debtor, which leads to the instrumentalization of bankruptcy procedures and distortion of their collective nature. It is established that such abuse has a dual legal nature: in the private-law dimension, it infringes the rights of the debtor and creditors, while in the public-law dimension, it distorts the functions of the insolvency framework and undermines trust in the judicial system. Particular attention is devoted to the European integration dimension of the issue. Based on the analysis of Directive (EU) 2019/1023 and the practice of EU Member States, the need is substantiated to shift from a formal admission-based model of commencement of proceedings to a substantive control-based model, which requires the assessment of the economic justification and good faith of the initiation. Proposals are formulated for improving national regulation, including the introduction of a functional-teleological review, the expansion of judicial discretion, and the strengthening of procedural safeguards against abuse. It is concluded that the implementation of these approaches is a necessary condition for enhancing the effectiveness of the insolvency framework and ensuring its compliance with EU law standards.
Authors: O. Vaskovskyi, V. Rieznikova
Language: English
Subfield: Law
Field: Social Sciences
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W7170058148