{"id":2481,"date":"2026-10-06T08:38:39","date_gmt":"2026-10-06T05:38:39","guid":{"rendered":"https:\/\/linden.lt\/tinklarastis\/creditors-rights-in-company-reorganisation-lithuania\/"},"modified":"2026-10-06T11:28:20","modified_gmt":"2026-10-06T08:28:20","slug":"creditors-rights-in-company-reorganisation-lithuania","status":"publish","type":"irasas","link":"https:\/\/linden.lt\/en\/blog\/creditors-rights-in-company-reorganisation-lithuania\/","title":{"rendered":"Creditors&#8217; rights in a Lithuanian company reorganisation: what to demand"},"template":"","kategorija":[],"class_list":["post-2481","irasas","type-irasas","status-publish","hentry"],"acf":{"visi_puslapiai_cta_statusas":false,"visi_puslapiai_cta_antraste":"","visi_puslapiai_cta_formos_id":"","visi_puslapiai_cta_papildomas_tekstas":"","visi_puslapiai_cta_nuotrauka":null,"tinklarastis_1_autorius":null,"tinklarastis_1_iraso_tipas":false,"dinamiski_blokai":[{"acf_fc_layout":"tekstas","tekstas":"<p>Neither the Civil Code nor the Law on Companies requires the creditors' consent to a reorganisation, but a creditor has the right to demand that the company provide additional security for the performance of its obligations. That right belongs to a creditor whose rights arose, and had not ended, before the public announcement of the terms of reorganisation, where there is reason to believe that the reorganisation will make performance more difficult. The demand can be made from the first day of the announcement until the shareholders' meeting that will decide on the reorganisation. Until a creditor who is entitled to security and asked for it in time receives it, or while a court dispute about it is pending, the reorganisation documents cannot be filed with the Register of Legal Entities (<em>Juridini\u0173 asmen\u0173 registras<\/em>, kept by the Centre of Registers, <em>Registr\u0173 centras<\/em>). Contracts pass to the continuing company without the other party's consent, but some contracts, and the law itself, give the other party a right to end them.<\/p>\r\n<p>Why creditors' consent is not needed, and when a bank's consent may be, is covered in our article <a href=\"https:\/\/linden.lt\/en\/blog\/company-reorganisation-creditor-and-employee-consent\/\">do you need the consent of creditors and employees to reorganise a company<\/a>. Here we explain what a creditor can do and what the company has to do in response.<\/p>\r\n<h2>How a creditor learns of the reorganisation<\/h2>\r\n<p>Article 2.101(1) of the Civil Code of the Republic of Lithuania (CK) offers a choice of two methods: announce the drawing up of the terms of reorganisation publicly three times at intervals of not less than thirty days, or announce it once and notify all creditors in writing. For public and private limited liability companies, Article 65(1) of the Law on Companies of the Republic of Lithuania (AB\u012e) provides the same two methods and requires the announcement to be made in the source named in the articles of association. If the single announcement is chosen, it must be made no later than 30 days before the general meeting on the reorganisation, and all of the company's creditors are notified in writing.<\/p>\r\n<p>A creditor has the right to inspect the reorganisation documents and to receive copies (Article 2.101(3) CK). At the company's registered office or on its website, the creditor must be given access to the terms of reorganisation, the articles of association, the sets of financial statements and other documents (Article 65(2) AB\u012e). At a creditor's request, the company must provide copies of these documents (Article 65(3) AB\u012e). This duty does not apply if the shareholders can download and print the documents without payment for that whole period; the creditor must then be able to inspect them at the company's registered office (Article 65(4) AB\u012e).<\/p>\r\n<p><strong>As of which day to draw up the list of creditors.<\/strong> The law sets no separate day for the list of creditors who receive notices. It does set a different day: additional security may be demanded by a creditor whose rights arose, and had not ended, before the public announcement of the drawn-up terms of reorganisation (Article 66(1) AB\u012e). From the same day, the company acquires the status of a company being reorganised or of a company participating in the reorganisation (Article 63(13) AB\u012e). It therefore makes sense to draw up the notice list as of the day of the announcement and to keep proof of to whom, and when, the notices were sent.<\/p>\r\n<h2>Additional security: who, when and in what case<\/h2>\r\n<p>Article 66(1) AB\u012e obliges every company being reorganised, and every company participating in the reorganisation, to provide additional security for the performance of its obligations to a creditor who demands it, if two conditions are met:<\/p>\r\n<ul><li>the creditor's rights arose, and had not ended, before the public announcement of the drawn-up terms of reorganisation;<\/li><li>there is reason to believe that the reorganisation will make performance more difficult. This is assessed having regard to the financial position of the company being reorganised or participating in the reorganisation and of the company that will operate after the reorganisation and to which the obligations pass under the terms of reorganisation.<\/li><\/ul>\r\n<p><strong>Time limit.<\/strong> A creditor may submit the demand from the first day on which the terms of reorganisation are announced until the general meeting whose agenda includes the decision on the reorganisation (Article 66(2) AB\u012e). Where the decision on a merger by acquisition is taken not by the general meeting but by the board or the CEO (Article 70(3) AB\u012e), the law sets no separate end date for this period.<\/p>\r\n<p><strong>When the company may refuse.<\/strong> The company need not provide additional security if performance of its obligations to the creditor is already sufficiently secured by a pledge, mortgage, surety or guarantee. Disputes about additional security are decided by a court (Article 66(3) AB\u012e).<\/p>\r\n<p><strong>What form of security.<\/strong> AB\u012e does not say what form the security must take. Under the general rule, performance of obligations may be secured by a penalty, a pledge (mortgage), a surety, a guarantee, earnest money or other methods provided for in the contract (Article 6.70(1) CK). The parties can agree on the method; if they do not, a court decides the dispute.<\/p>\r\n<p><strong>What happens if no security is given.<\/strong> Documents for registering the companies that will operate after the reorganisation or their articles, and for deregistering the companies that cease, cannot be filed with the register if additional security has not been provided to a creditor who is entitled to it and demanded it in time, or until a court judgment becomes final where the dispute is before a court (Article 66(1), (2) and (4) AB\u012e). How this delays the end of the reorganisation is described in our article <a href=\"https:\/\/linden.lt\/en\/blog\/company-reorganisation-dates-shareholders-notary\/\">when a reorganisation ends, who becomes a shareholder and whether a notary is needed<\/a>.<\/p>\r\n<h2>The right to demand early performance<\/h2>\r\n<p>Article 2.101(2) CK gives a creditor of a legal entity being reorganised the right to demand termination or early performance of an obligation, as well as compensation for losses. The Supreme Court of Lithuania (<em>Lietuvos Auk\u0161\u010diausiasis Teismas<\/em>, LAT) has held that one of two alternative conditions is enough: either this is provided for in the transaction, or there is reason to believe that the reorganisation will make performance more difficult and, at the creditor's request, additional security was not provided (LAT ruling of 19 October 2022 in civil case No. e3K-3-236-823\/2022, para. 47).<\/p>\r\n<p>So the first question is the contract itself. If it says that a reorganisation gives the creditor the right to terminate it or to demand earlier performance, the creditor does not need to ask for additional security first.<\/p>\r\n<p>For a small partnership (<em>ma\u017eoji bendrija<\/em>, MB), Article 27(7) of the Law on Small Partnerships of the Republic of Lithuania (MB\u012e) gives the creditor the same right: to demand termination or early performance of an obligation and compensation for losses, if this is provided for in the transaction or there is reason to believe that the reorganisation will make performance more difficult, and the partnership did not provide additional security at the creditor's request. MB\u012e has no registration block like Article 66(4) AB\u012e.<\/p>\r\n<h2>Do contracts pass without the other party's consent<\/h2>\r\n<p>In a merger by acquisition, all the rights and obligations of the entity being reorganised pass to the entity it is merged into (Article 2.97(3) CK). In a merger by formation of a new entity, they pass to the new legal entity (Article 2.97(4) CK). Assets, rights and obligations pass from the registration of the newly created companies or of the amended articles of the continuing companies in the Register of Legal Entities (from 1 November 2026: from the entry of the amended articles in the information system of the Register of Legal Entities), unless the terms of reorganisation provide otherwise (Article 68(1) AB\u012e).<\/p>\r\n<p>LAT has stressed that universal succession is an essential feature of reorganisation, even though at least one legal entity still ceases to exist (LAT e3K-3-236-823\/2022, para. 41), and that a reorganisation in itself is not a ground to terminate or amend contracts concluded earlier (ibid., para. 45).<\/p>\r\n<p>Two rules follow from this:<\/p>\r\n<ul><li><strong>Claims.<\/strong> A right of claim passes to another person by operation of law where there is universal succession to the creditor's rights (Article 6.101(4)(1) CK). The consent of the reorganised company's debtors is therefore not needed.<\/li><li><strong>Debts.<\/strong> Article 6.116(1) CK requires the creditor's consent where a debtor transfers its debt by an agreement with the transferee. In a reorganisation, obligations pass not under such an agreement but under the rules on reorganisation (Article 2.97(3) CK). To protect the creditor, the law provides not a consent but the additional security mechanism.<\/li><\/ul>\r\n<p><strong>When the other party may still end the contract.<\/strong> First, where the contract itself provides for it (Article 2.101(2) CK). Second, where the law allows it directly. In a lease, the transfer of ownership of the leased item is a ground for the lease to end if the tenant demands it (Article 6.494(3) CK). LAT has held that the tenant has this right also where the landlord ceases to exist because of a reorganisation (LAT e3K-3-236-823\/2022, para. 50). The right is limited only by the general prohibition of abuse of rights (ibid., para. 50). The same ruling recognised that a tenant may waive this right in advance in the lease (ibid., paras. 52 and 59). So review lease, credit, leasing and other long-term contracts before the reorganisation, and check the leases for such a waiver.<\/p>\r\n<h2>Who is liable for obligations after the reorganisation<\/h2>\r\n<p><strong>Merger by acquisition or formation of a new company.<\/strong> All obligations pass to the continuing or new company (Article 2.97(3) and (4) CK). The creditor is left with one debtor, and AB\u012e provides for joint and several liability of companies only in a division (Article 68(3) and (4) AB\u012e).<\/p>\r\n<p><strong>Division.<\/strong> If an obligation of the company being divided is not allocated under the terms of reorganisation to any of the companies operating after the reorganisation, all of those companies are jointly and severally liable for it (Article 68(3) AB\u012e). If an obligation is allocated to one company, that company does not perform it, and additional guarantees were not provided to the creditors who demanded them, the other companies operating after the reorganisation are jointly and severally liable (Article 68(4) AB\u012e). In both cases, each company's liability is limited to the equity allocated to it under the terms of reorganisation. A separation (<em>atskyrimas<\/em>) is governed, mutatis mutandis, by the provisions on reorganisation by division (Article 71(2) AB\u012e).<\/p>\r\n<p><strong>Invalid reorganisation.<\/strong> If a court declares a reorganisation invalid, all the legal entities that took part in it are jointly and severally liable for obligations arising from transactions that the entities operating after it concluded before the register data were changed (Article 2.102(4) CK). A reorganisation cannot be declared invalid if more than six months have passed between the end of the legal entity and the application to court (Article 2.102(2) CK).<\/p>\r\n<p><strong>Members.<\/strong> Where a legal entity whose members are liable for its obligations ceases to exist, those members remain subsidiarily liable for three years for obligations that arose before the rights and obligations passed (Article 2.98(2) CK). Private and public limited liability companies are legal entities with limited civil liability (Article 2(2) AB\u012e), so this rule does not apply to their shareholders.<\/p>\r\n<p><strong>Taxes.<\/strong> The tax obligation of a reorganised legal entity must be performed by its successor in rights and obligations (Article 91(1) of the Law on Tax Administration of the Republic of Lithuania, MA\u012e). Unpaid amounts that come to light after the reorganisation also pass to the successor (Article 91(2) MA\u012e). Article 91(1) and (3) MA\u012e also apply to public and private limited liability companies in a separation (<em>atskiriamos bendrov\u0117s<\/em>) (Article 91(4) MA\u012e).<\/p>\r\n<h2>More on reorganisation<\/h2>\r\n<ul><li><a href=\"https:\/\/linden.lt\/en\/services\/company-law\/reorganisations-and-separations-of-companies\/\">Reorganisations and separations of companies: service page<\/a><\/li><li><a href=\"https:\/\/linden.lt\/en\/blog\/company-reorganisation-creditor-and-employee-consent\/\">Reorganising a company: do you need the consent of creditors and employees?<\/a><\/li><li><a href=\"https:\/\/linden.lt\/en\/blog\/reorganisation-terms-contents-notice-and-30-days-lithuania\/\">Terms of reorganisation in Lithuania: who drafts them, contents, notice<\/a><\/li><li><a href=\"https:\/\/linden.lt\/en\/blog\/employees-in-company-reorganisation-lithuania\/\">Employees in a company reorganisation: Article 51, CEO and works council<\/a><\/li><\/ul>\r\n<h2>How to start<\/h2>\r\n<p>Send us the draft terms of reorganisation and the list of creditors with copies of the contracts, and tell us whether any creditor has already made a demand. We will assess who can demand additional security and which contracts allow the other party to end them.<\/p>\r\n<p>Phone +370 5 212 1506, email info@linden.lt<\/p>\r\n<p>More about this service: <a href=\"https:\/\/linden.lt\/en\/services\/company-law\/reorganisations-and-separations-of-companies\/\">Reorganisations and separations of companies<\/a>.<\/p>"}]},"_links":{"self":[{"href":"https:\/\/linden.lt\/en\/wp-json\/wp\/v2\/irasas\/2481","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/linden.lt\/en\/wp-json\/wp\/v2\/irasas"}],"about":[{"href":"https:\/\/linden.lt\/en\/wp-json\/wp\/v2\/types\/irasas"}],"version-history":[{"count":1,"href":"https:\/\/linden.lt\/en\/wp-json\/wp\/v2\/irasas\/2481\/revisions"}],"predecessor-version":[{"id":2609,"href":"https:\/\/linden.lt\/en\/wp-json\/wp\/v2\/irasas\/2481\/revisions\/2609"}],"wp:attachment":[{"href":"https:\/\/linden.lt\/en\/wp-json\/wp\/v2\/media?parent=2481"}],"wp:term":[{"taxonomy":"kategorija","embeddable":true,"href":"https:\/\/linden.lt\/en\/wp-json\/wp\/v2\/kategorija?post=2481"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}