Legal consequences of opening the bankruptcy proceedings on financial leasing

The paper analyzes legal provisions, the standpoints of court practice, as well as opinions of jurisprudence regarding the legal consequences of opening bankruptcy proceedings on financial leasing. Special attention is devoted to the right of separation of the leased asset - an exclusion right (right to separate recovery, right of exemption) belonging to the lessor if bankruptcy proceedings are opened against the lessee. The significance of the prohibition of enforcement and settlement, as a legal consequence of opening bankruptcy proceedings, is highlighted. This prohibition also appropriately applies to the enforcement of the lessor's right to reclaim the leased asset from the bankruptcy estate until the decision on the debtor's bankruptcy (or until the approval of the reorganization plan). The study also examines the problems that arise if the bankrupt debtor or the bankruptcy trustee fails to adequately safeguard the leased asset, exposing it to risk. In such cases, the lessor may request the lifting of security measures imposed in prior bankruptcy proceedings or the termination of the stay of execution and settlement prohibition as a legal consequence of opening bankruptcy proceedings. The paper further explains the lessor's right to reclaim the leased asset in the event of a bankruptcy declaration, noting an exception where the bankruptcy judge may - upon the trustee's proposal and with creditors' committee approval - reject the reclamation (separation) request and order the full contractual lease payment as an obligation of the bankruptcy estate. The consequences of non-payment, which grant the lessor the right to demand repossession and enforcement on the leased asset in accordance with the contract or law, are also addressed. Lastly, the study analyzes theoretical and practical issues concerning the obligation of the bankrupt debtor or trustee to return the leased asset to the lessor after the approved reorganization plan is confirmed - if the plan does not provide for the continued use of the leased asset and payment of lease fees under the leasing agreement.