ARMENIA Law and Practice Contributed by: Narine Beglaryan, Arianna Adamyan and Anahit Aloyan, Concern Dialog
Companies, Investment Fund Managers, and Insur - ance Companies (rather than the Law on Bankruptcy). 2.9.2 Overview of Relevant Types of Voluntary and Involuntary Restructurings, Reorganisations, In Armenia, corporate reorganisations are carried out through consolidation, absorption (merger), division, separation, and restructuring of legal entities. Both reorganisation and restructuring in Armenia can be either voluntary or involuntary. In practice, most are initiated voluntarily through corporate decisions made by the relevant governing bodies. However, involun - tary restructuring may be required when the number of shareholders in a LLC or CJSC exceeds 49. In such cases, the company shall either reduce the number of participants or decide to restructure into an OJSC within one year. Otherwise, the company will be liqui - dated by the court decision. Insolvencies and Receivership Restructurings/Reorganisations Involuntary reorganisation may arise as a conse - quence of violations of the RA Law on Protection of Economic Competition. In case of abusing the dominant position two or more times in a year, the Competition Protection Commis - sion (the Commission) may adopt a decision on dis - aggregation (division, separation, alienation of unit shares or means), which shall be subject to enforce - ment by the economic entity not later than within 6 months following the entry into force of that decision. If a concentration is carried out without prior approval from the Commission and is later determined to be prohibited, the Commission may require: • separating the legal entity that was absorbed; and • dividing the entities that were consolidated. Insolvencies/Receivership A debtor can be declared bankrupt by a court deci - sion, either voluntarily (at the debtor’s own initiative) or involuntarily (at the request of a creditor), provided the debtor is insolvent.
A court may declare a debtor bankrupt in cases of either (i) involuntary bankruptcy or (ii) voluntary bank - ruptcy. Involuntary bankruptcy • If the debtor has defaulted for 90 days or more on undisputed payment obligations exceeding 2,000 times the statutory minimum wage, and this default continues at the time of the court decision (ie, actual insolvency). Voluntary bankruptcy • If the debtor’s obligations exceed the value of their assets by at least 2,000 times the statutory mini- mum wage. • If the debtor’s public-law obligations (eg, taxes) exceed the value of their assets. The minimum wage is equal to AMD 1,000. The institute of receivership is not recognised under Armenian law; instead, some of the duties of receiver - ship are conducted by a bankruptcy manager. 2.9.3 Co-Ordination, Recognition or Relief in Connection With Overseas Proceedings Decisions made by foreign courts in insolvency (bankruptcy) cases are recognised in the Republic of Armenia based on international treaties and, in their absence, on the principle of reciprocity. The Bankruptcy Law does not provide a special pro - cedure for recognising foreign court decisions in insol - vency (bankruptcy) cases; instead, the general proce - dure regulated by the Civil Procedure Code applies. The law does not contain any statutory provisions that mandate cross-border cooperation. Armenia has not adopted the UNCITRAL Model Law on Cross-Border Insolvency. 2.9.4 Effect of Lessee’s Insolvency on a Deregistration Power of Attorney Irrevocable deregistration and export request authori - sation (IDERA) is not recognised in Armenia because the country is not a party to the Cape Town Conven - tion.
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