Exclusion of Cultural and Social Assets from Bankruptcy Estate Act

In the case of the bankruptcy of an enterprise or organisation in state ownership (hereinafter enterprise), cultural and social assets belonging to the state shall be excluded from the bankruptcy estate if the specified assets are necessary for the social or cultural servicing of the residents of the rural municipality or city or for the social or economic development of the Republic of Estonia.

The cultural and social assets specified in § 1 of this Act are buildings or civil engineering works or parts thereof (together with the inventory therein) which, at least during 18 months before the commencement of bankruptcy proceedings, have been used as

1) pre-school child care institutions, schools or other educational institutions;

2) pharmacies, hospitals, medical aid posts, outpatient hospitals or other health care institutions;

3) libraries, community centres or community cultural centres, museums, theatres or other cultural institutions;

4) sports grounds, sports halls or other sports institutions;

5) child care institutions, shelters or nursing homes or other institutions providing social assistance and services.

The Minister of Culture, the Minister of Education and Research, the Minister of Social Affairs, the local government of the location of an enterprise or a minister who directs the ministry in whose area of government the enterprise the bankruptcy estate of which includes cultural and social assets is located, shall submit a reasoned application for the exclusion of the specified assets from the bankruptcy estate to the Government of the Republic within one month after the date of publication of the bankruptcy notice in the Riigi Teataja and inform the trustee in bankruptcy of the corresponding application within the same period.

A trustee in bankruptcy shall ensure preservation of cultural and social assets if notification has been given regarding submission of an application for exclusion of the assets from a bankruptcy estate pursuant to the procedure provided for in § 3 of this Act. The specified assets shall not be transferred until a decision of the Government of the Republic regarding exclusion from the bankruptcy estate has been made.

The Government of the Republic shall decide the exclusion of cultural or social assets from the bankruptcy estate within 20 days after the receipt of the application specified in § 3 of this Act.

Upon exclusion of cultural or social assets from a bankruptcy estate, the Government of the Republic shall designate an administrator of the excluded assets or decide, at the request of the local government, transfer of the assets into municipal ownership or propose to the local government transfer of the assets into municipal ownership.

The appropriate ministry shall inform the trustee in bankruptcy of a decision to exclude cultural or social assets specified in § 5 of this Act from the bankruptcy estate immediately but not later than within 10 days after the corresponding decision is made.

Upon disagreement with a decision regarding exclusion of cultural or social assets from the bankruptcy estate, a trustee in bankruptcy has the right of recourse to a court within 10 days after the entry into force of the decision specified in § 5 of this Act.

A trustee in bankruptcy has the right to apply for the reinclusion of the assets specified in § 2 of this Act in the bankruptcy estate by a court proceeding if, within six months after the exclusion of the assets from the bankruptcy estate, the assets are not used for the purposes specified in the application. Upon reinclusion of the specified assets in the bankruptcy estate, the claims regarding arrears specified in § 11 of this Act shall be restored.

A trustee in bankruptcy shall ensure preservation of the cultural and social assets excluded from the bankruptcy estate on the basis of the decision of the Government of the Republic until transfer of the assets pursuant to the procedure provided for in § 12 of this Act. The costs incurred by the trustee in bankruptcy for the performance of the assigned duty shall be reimbursed pursuant to the procedure established by the Government of the Republic.

Upon exclusion of cultural or social assets from a bankruptcy estate, the claims regarding state arrears shall be reduced by the book value of these assets.

A trustee in bankruptcy shall transfer the cultural or social assets excluded from a bankruptcy estate to a person specified in § 6 of this Act on the basis of a legal instrument signed by the trustee in bankruptcy and the person specified in § 6 of this Act.