Results we have achieved for our clients
Ukrainian company took your money and disappeared — legal strategies to recover funds
This article was prepared by Ukrainian lawyer Mykyta Chubenko, who specializes in debt collection and business law — including contract disputes, creditor protection, and the enforcement of court judgments.
Get a Free Consultation
Your request will be reviewed by the lawyer who handles your type of case and followed up via email — no intermediaries.
A lawyer will contact you during business hours (Mon–Fri, 10:00 AM – 5:00 PM Kyiv time (GMT+2 / GMT+3 in summer)
A situation in which a foreign company or investor transfers funds to a Ukrainian counterparty and subsequently loses contact with it tends to follow a similar pattern: first, the deadlines for performance are repeatedly postponed; then the office stops responding in a timely manner; and eventually all communication ceases. At this stage, it often appears that the funds have been irretrievably lost.
In practice, this is not always the case. However, it is essential to understand that the outcome depends not on the mere formal existence of a contract, but on how promptly and correctly you structure your subsequent actions. Within the Ukrainian jurisdiction, there are effective legal mechanisms for the recovery of funds, but they require a precise strategic approach from the outset.
In practice, this is not always the case. However, it is essential to understand that the outcome depends not on the mere formal existence of a contract, but on how promptly and correctly you structure your subsequent actions. Within the Ukrainian jurisdiction, there are effective legal mechanisms for the recovery of funds, but they require a precise strategic approach from the outset.
Why This Occurs: The Context of Ukrainian Practice
It is impossible to disregard the current context. Ukraine remains in a state of war, which directly affects the business environment. Any crisis situation entails not only objective operational challenges for businesses, but also an increase in the number of bad-faith market participants. Under the cover of genuine difficulties, companies emerge that never intended to perform their obligations from the outset.
At the same time, economic factors are also at play. Market volatility, rising costs, and reduced solvency in certain sectors create conditions in which some companies begin operating on a model of “promising more than they can deliver.” In some cases, this reflects an attempt to survive; in others, it is a deliberate strategy to secure advance payments without subsequent performance.
For foreign companies, these risks are compounded by a lack of familiarity with local practices. A counterparty may appear credible on the surface—through a professional website, presentations, and demonstrations of processes. However, this does not always correspond to actual business activity or sufficient capacity to fulfill its obligations.
As a result, a high-risk environment emerges in which standard due diligence tools and formal safeguards are not fully effective. In such circumstances, decisive importance shifts to a substantive assessment of the counterparty and its actual conduct.
At the same time, economic factors are also at play. Market volatility, rising costs, and reduced solvency in certain sectors create conditions in which some companies begin operating on a model of “promising more than they can deliver.” In some cases, this reflects an attempt to survive; in others, it is a deliberate strategy to secure advance payments without subsequent performance.
For foreign companies, these risks are compounded by a lack of familiarity with local practices. A counterparty may appear credible on the surface—through a professional website, presentations, and demonstrations of processes. However, this does not always correspond to actual business activity or sufficient capacity to fulfill its obligations.
As a result, a high-risk environment emerges in which standard due diligence tools and formal safeguards are not fully effective. In such circumstances, decisive importance shifts to a substantive assessment of the counterparty and its actual conduct.
Mistake No. 1: Insufficient Due Diligence of the Counterparty
Foreign companies often limit their verification to reviewing the registration details of a Ukrainian counterparty. The mere existence of a company in the state register is perceived as a sufficient safeguard. In reality, registration in Ukraine confirms neither solvency nor the actual conduct of business activities.
Practice shows that a company’s formal status provides little insight into its reliability. In a significant number of cases where clients request preliminary due diligence, substantial risks are identified even at the initial stage. These are not minor technical discrepancies, but systemic indicators of concern: outstanding debts, repeated involvement in litigation as a defendant, ongoing enforcement proceedings, signs of fictitious operations, or indications of insolvency or bankruptcy procedures.
Behavioral patterns should also be taken into account. In certain cases, companies systematically operate on a model of receiving advance payments without subsequent performance. This becomes evident from court practice, where similar claims are repeatedly brought by different creditors.
A common scenario involves the use of so-called “technical” entities. A legal entity or sole proprietor formally exists but lacks assets, employees, and a genuine office presence. Such structures are not designed for long-term operations and are used exclusively as instruments for obtaining funds without fulfilling contractual obligations.
As a result, the absence of thorough due diligence often means that the risks become apparent only after the funds have been transferred, when opportunities for preventive action have effectively been lost.
Practice shows that a company’s formal status provides little insight into its reliability. In a significant number of cases where clients request preliminary due diligence, substantial risks are identified even at the initial stage. These are not minor technical discrepancies, but systemic indicators of concern: outstanding debts, repeated involvement in litigation as a defendant, ongoing enforcement proceedings, signs of fictitious operations, or indications of insolvency or bankruptcy procedures.
Behavioral patterns should also be taken into account. In certain cases, companies systematically operate on a model of receiving advance payments without subsequent performance. This becomes evident from court practice, where similar claims are repeatedly brought by different creditors.
A common scenario involves the use of so-called “technical” entities. A legal entity or sole proprietor formally exists but lacks assets, employees, and a genuine office presence. Such structures are not designed for long-term operations and are used exclusively as instruments for obtaining funds without fulfilling contractual obligations.
As a result, the absence of thorough due diligence often means that the risks become apparent only after the funds have been transferred, when opportunities for preventive action have effectively been lost.
Mistake No. 2: Reliance Solely on the Contract
Foreign companies often treat a signed contract as a sufficient safeguard for a transaction. In Ukrainian practice, this is a misconception. A contract records the agreed terms, but it does not address the key question—whether the counterparty is capable of performing them. A company may assume obligations without having any assets or genuine business activity. In such circumstances, the contract remains a formality, and the risk is effectively shifted to the party making the advance payment.
A typical scenario is as follows: funds are transferred, the obligations are either not performed or only partially fulfilled, and the matter proceeds to litigation. If the debtor has no assets, even a favorable court judgment does not guarantee recovery. A separate risk is the artificial creation of the appearance of a functioning business. A counterparty may demonstrate production facilities, equipment, or processes that in fact belong to another company, while the contract is executed with a legal entity that holds no assets.
As a result, a situation arises in which the obligations exist only on paper. This is why reliance on the contract alone, without a substantive assessment of the counterparty, often leads to losses after the transfer of funds—particularly for foreign companies unfamiliar with local practice.
A typical scenario is as follows: funds are transferred, the obligations are either not performed or only partially fulfilled, and the matter proceeds to litigation. If the debtor has no assets, even a favorable court judgment does not guarantee recovery. A separate risk is the artificial creation of the appearance of a functioning business. A counterparty may demonstrate production facilities, equipment, or processes that in fact belong to another company, while the contract is executed with a legal entity that holds no assets.
As a result, a situation arises in which the obligations exist only on paper. This is why reliance on the contract alone, without a substantive assessment of the counterparty, often leads to losses after the transfer of funds—particularly for foreign companies unfamiliar with local practice.
Mistake No. 3: Delayed Response and Attempts to “Negotiate” Instead of Taking Action
The most critical mistake is waiting. Clients often give the counterparty “more time,” expecting voluntary performance, whereas in practice this period is used against them. During this time, assets may be withdrawn, bank accounts closed, and the company itself re-registered to nominee individuals. The situation is further aggravated by ongoing negotiations. If obligations are systematically not performed, deadlines are repeatedly postponed, and performance is only partial, this is not a temporary difficulty but a deliberate tactic to delay the process. The counterparty maintains communication, provides assurances, and thereby reduces the likelihood that you will initiate legal action.
Force majeure—such as the war or other extraordinary circumstances—is often cited as justification. Such claims must be verified: genuine incidents can be confirmed through official sources. The absence of verification is a clear risk indicator. Practical experience should also be taken into account: in Ukraine, negotiations without leverage rarely lead to a meaningful outcome. As long as the counterparty faces no tangible consequences, there is no incentive to change its behavior. In most cases, progress begins only after legal measures are initiated—such as filing a claim or seeking the attachment of assets or bank accounts.
Accordingly, at the first signs of non-performance, the priority is not to wait or continue dialogue, but to promptly commence legal action. This allows the situation to be formally documented and prevents the counterparty from gaining time to dissipate assets.
Force majeure—such as the war or other extraordinary circumstances—is often cited as justification. Such claims must be verified: genuine incidents can be confirmed through official sources. The absence of verification is a clear risk indicator. Practical experience should also be taken into account: in Ukraine, negotiations without leverage rarely lead to a meaningful outcome. As long as the counterparty faces no tangible consequences, there is no incentive to change its behavior. In most cases, progress begins only after legal measures are initiated—such as filing a claim or seeking the attachment of assets or bank accounts.
Accordingly, at the first signs of non-performance, the priority is not to wait or continue dialogue, but to promptly commence legal action. This allows the situation to be formally documented and prevents the counterparty from gaining time to dissipate assets.
Typical Scenarios Faced by Foreign Companies in Ukraine
In practice, such situations tend to develop according to several recurring patterns. It is highly likely that you will recognize one of them.
Advance Payment for Goods — and Non-Delivery
A supply contract is executed, the terms are agreed, and an advance payment is requested. The funds are transferred, but the goods are never delivered.
At the initial stage, the situation appears operational: the counterparty remains in contact, confirms receipt of funds, and may even provide documents or simulate preparations for shipment or export. Subsequently, deadlines begin to shift and explanations are offered. Over time, responses become increasingly sporadic, communication deteriorates, and at a certain point contact effectively ceases altogether.
At the initial stage, the situation appears operational: the counterparty remains in contact, confirms receipt of funds, and may even provide documents or simulate preparations for shipment or export. Subsequently, deadlines begin to shift and explanations are offered. Over time, responses become increasingly sporadic, communication deteriorates, and at a certain point contact effectively ceases altogether.
IT or Service Project Without Completion
The counterparty receives payment for a project (development, consulting, or other services), initiates work, and demonstrates interim results.
At the outset, the process appears to be under control: calls are held regularly, reports are submitted, and individual stages or demo versions are presented. This creates the impression that the project is progressing as planned. However, over time deadlines begin to shift, tasks remain “in progress,” and ultimately the project is not brought to completion—the final deliverable is either not provided at all or is delivered in a materially incomplete form.
At the outset, the process appears to be under control: calls are held regularly, reports are submitted, and individual stages or demo versions are presented. This creates the impression that the project is progressing as planned. However, over time deadlines begin to shift, tasks remain “in progress,” and ultimately the project is not brought to completion—the final deliverable is either not provided at all or is delivered in a materially incomplete form.
Work Performed, but the Result Is Unusable
The obligations are formally performed: deliverables are submitted, project stages are closed, and documents are signed. However, the actual quality of the result does not meet expectations: the product does not function properly, fails to comply with technical requirements, or cannot be used in business operations without substantial rework. As a result, a situation arises in which the obligations are fulfilled on paper, yet no real value is created for the client.
Raising Funds for a Business Project That Is Never Implemented
An investor is offered participation in a project or business venture, supported by a presented concept, financial projections, and an anticipated return on investment. At the initial stage, communication is typically active: details are discussed, presentation materials are provided, and elements of operational activity or launch preparation may be demonstrated. This creates the impression that the project is already in the implementation phase.
After the funds are received, activity gradually declines. Deadlines are postponed, explanations are provided, and certain processes are described as being “in progress,” yet no tangible advancement takes place. Ultimately, the project either comes to a standstill or continues to exist only formally, without actual development or any meaningful outcome for the investor.
After the funds are received, activity gradually declines. Deadlines are postponed, explanations are provided, and certain processes are described as being “in progress,” yet no tangible advancement takes place. Ultimately, the project either comes to a standstill or continues to exist only formally, without actual development or any meaningful outcome for the investor.
What to Do: A Practical Strategy for Recovering Funds
An effective recovery strategy requires a clear understanding of the debtor’s position and a structured legal approach from the outset. Below are the key stages that shape a coherent and results-oriented course of action.
1. Rapid Legal Assessment
The first step is not to issue a formal claim, but to conduct an initial legal assessment of the situation. It is essential to establish the current status of the company: whether it remains active, whether it is undergoing liquidation, and whether there have been changes in the director or shareholders within a short period following the transaction. Such changes often indicate an attempt to evade liability.
A separate review is conducted to identify the existence of assets, including real estate, vehicles, corporate rights, and participation in other companies. In parallel, the company’s litigation history and potential affiliations with other legal entities are analyzed. This stage makes it possible to determine whether the debtor has substantive economic presence and whether a standard recovery procedure is viable, or if a more complex legal strategy will be required.
A separate review is conducted to identify the existence of assets, including real estate, vehicles, corporate rights, and participation in other companies. In parallel, the company’s litigation history and potential affiliations with other legal entities are analyzed. This stage makes it possible to determine whether the debtor has substantive economic presence and whether a standard recovery procedure is viable, or if a more complex legal strategy will be required.
2. Evidence Collection
The next step is the systematic consolidation of all interactions with the counterparty. This extends beyond the contract itself to include all supporting documentation: correspondence, invoices, acceptance certificates, payment records, technical specifications, and commercial proposals. In many cases, it is the correspondence that more accurately reflects the parties’ actual agreements than the formal contract.
Within Ukrainian judicial practice, the decisive factor is the totality of evidence. A single document rarely determines the outcome of a case; rather, a well-structured body of evidence forms a strong and sustainable legal position. Accordingly, the objective at this stage is not merely to gather documents, but to organize them into a coherent and consistent narrative that clearly demonstrates the obligations undertaken and their breach.
Within Ukrainian judicial practice, the decisive factor is the totality of evidence. A single document rarely determines the outcome of a case; rather, a well-structured body of evidence forms a strong and sustainable legal position. Accordingly, the objective at this stage is not merely to gather documents, but to organize them into a coherent and consistent narrative that clearly demonstrates the obligations undertaken and their breach.
3. Choosing Between Civil and Criminal Remedies
This is a pivotal stage that determines the overall legal strategy. Where the situation constitutes a standard breach of contract, a civil law mechanism is applied—typically involving debt recovery through court proceedings. However, if there are indications that the obligations were never intended to be performed (for example, the company was incorporated shortly before the transaction, lacks operational resources, or ceases communication immediately after receiving funds), there may be grounds to initiate criminal proceedings on the basis of fraud.
In practice, these mechanisms are often used in parallel. The initiation of criminal proceedings can significantly strengthen the creditor’s negotiating position: it introduces the risk of personal liability and additional legal constraints for the debtor and related parties, which in many cases accelerates the shift from formal justifications to substantive negotiations on repayment.
In practice, these mechanisms are often used in parallel. The initiation of criminal proceedings can significantly strengthen the creditor’s negotiating position: it introduces the risk of personal liability and additional legal constraints for the debtor and related parties, which in many cases accelerates the shift from formal justifications to substantive negotiations on repayment.
4. Judicial Debt Recovery
The judicial stage includes filing a claim, court proceedings, and obtaining a judgment. It is important to understand that the court considers only the evidence submitted by the parties and does not independently search for the debtor’s assets. Its role is to legally confirm the existence of the debt and issue a binding decision.
At the same time, in practice it is critical not to limit the strategy to merely filing a claim. Awaiting a court judgment without seeking interim relief creates a window of opportunity for a bad-faith counterparty: during this period, assets may be dissipated and funds withdrawn from accounts.
Ukrainian procedural law provides for interim measures (security for the claim), which allow the claimant—already at the stage of filing the claim—to petition for the freezing of bank accounts, seizure of property, and restrictions on the disposal of corporate rights. This mechanism helps preserve the debtor’s asset base and mitigates the risk of asset stripping.
At the same time, in practice it is critical not to limit the strategy to merely filing a claim. Awaiting a court judgment without seeking interim relief creates a window of opportunity for a bad-faith counterparty: during this period, assets may be dissipated and funds withdrawn from accounts.
Ukrainian procedural law provides for interim measures (security for the claim), which allow the claimant—already at the stage of filing the claim—to petition for the freezing of bank accounts, seizure of property, and restrictions on the disposal of corporate rights. This mechanism helps preserve the debtor’s asset base and mitigates the risk of asset stripping.
“Court proceedings require a clearly defined legal position. Before applying to the court, it is essential to understand that the court considers only those arguments and evidence submitted by the parties and does not formulate a legal position on their behalf. This means that the outcome largely depends on how correctly the legal position is chosen and how comprehensively it is substantiated from the outset.
For this reason, prior to filing a claim, it is advisable to assess the prospects and risks, determine the viability of judicial protection, and understand what result is realistically achievable in the specific circumstances. Such an approach enables informed decision-making and helps avoid errors that may affect the effectiveness of legal protection in court.”
For this reason, prior to filing a claim, it is advisable to assess the prospects and risks, determine the viability of judicial protection, and understand what result is realistically achievable in the specific circumstances. Such an approach enables informed decision-making and helps avoid errors that may affect the effectiveness of legal protection in court.”
5. Enforcement Stage: The Critical Point of Outcome
The enforcement stage should not be viewed as an uncertain final step, but rather as a logical continuation of a properly structured legal strategy.
Where assets have been identified at an early stage and timely measures have been taken to secure them, enforcement of the court judgment is, as a rule, significantly more efficient. In such cases, the process does not involve searching for assets “from scratch,” but instead focuses on their compulsory realization.
Enforcement in Ukraine is carried out either by the State Enforcement Service or by private enforcement officers. In practice, private enforcement officers tend to operate more efficiently due to a lower caseload and greater procedural flexibility.
Ukrainian law provides for a broad range of enforcement mechanisms, including the freezing of bank accounts followed by the recovery of funds, as well as execution against real estate, vehicles, equipment, corporate rights, and other assets of the debtor. Seized property is subject to sale through the electronic auction system SETAM, ensuring transparency and practical enforceability of the process.
Certain categories of assets have specific procedures. For example, land plots are sold via Prozorro.Sale, although the overall enforcement logic remains unchanged: the asset is seized, appraised, and offered for auction. Importantly, in practice, most such assets can be identified at the stage of the initial legal assessment through public registers. This allows for the development of a realistic understanding of enforcement prospects and expected timelines for recovery.
Where assets have been identified at an early stage and timely measures have been taken to secure them, enforcement of the court judgment is, as a rule, significantly more efficient. In such cases, the process does not involve searching for assets “from scratch,” but instead focuses on their compulsory realization.
Enforcement in Ukraine is carried out either by the State Enforcement Service or by private enforcement officers. In practice, private enforcement officers tend to operate more efficiently due to a lower caseload and greater procedural flexibility.
Ukrainian law provides for a broad range of enforcement mechanisms, including the freezing of bank accounts followed by the recovery of funds, as well as execution against real estate, vehicles, equipment, corporate rights, and other assets of the debtor. Seized property is subject to sale through the electronic auction system SETAM, ensuring transparency and practical enforceability of the process.
Certain categories of assets have specific procedures. For example, land plots are sold via Prozorro.Sale, although the overall enforcement logic remains unchanged: the asset is seized, appraised, and offered for auction. Importantly, in practice, most such assets can be identified at the stage of the initial legal assessment through public registers. This allows for the development of a realistic understanding of enforcement prospects and expected timelines for recovery.
Factors Affecting the Outcome
The outcome in such matters is determined not by a single factor, but by their combination. The speed of response directly affects the preservation of assets. The earlier action is initiated, the higher the likelihood of identifying and securing those assets. The quality of the evidence base determines the court’s decision. Even a seemingly straightforward case may be lost if it is inadequately prepared.
Timelines and Expectations
The most critical mistake is delay. Clients often rely on voluntary performance and continue communication, whereas in practice this works against them. During this period, the counterparty gains time to dissipate assets, close bank accounts, or re-register the company to nominee individuals.
The situation is further aggravated by prolonged negotiations. If obligations are systematically not performed, deadlines are repeatedly extended, and the result is absent or only partial, this is not a temporary difficulty but a pattern of conduct. The counterparty maintains communication, provides assurances, and thereby reduces the likelihood of a transition to legal action.
Force majeure—such as the war or other extraordinary circumstances—is frequently cited as justification. Such claims must be verified: genuine incidents can be confirmed through official sources. The absence of such confirmation is a heightened risk indicator.
Practice shows that negotiations without leverage rarely produce results. As long as no legal consequences arise for the counterparty, there is no incentive to change its behavior. In most cases, progress begins only after legal measures are initiated—filing a claim and taking steps to identify and secure assets.
Accordingly, at the first signs of non-performance, the objective is not to continue waiting, but to move promptly to legal action. This allows the situation to be formally documented and minimizes the risk of asset dissipation.
The situation is further aggravated by prolonged negotiations. If obligations are systematically not performed, deadlines are repeatedly extended, and the result is absent or only partial, this is not a temporary difficulty but a pattern of conduct. The counterparty maintains communication, provides assurances, and thereby reduces the likelihood of a transition to legal action.
Force majeure—such as the war or other extraordinary circumstances—is frequently cited as justification. Such claims must be verified: genuine incidents can be confirmed through official sources. The absence of such confirmation is a heightened risk indicator.
Practice shows that negotiations without leverage rarely produce results. As long as no legal consequences arise for the counterparty, there is no incentive to change its behavior. In most cases, progress begins only after legal measures are initiated—filing a claim and taking steps to identify and secure assets.
Accordingly, at the first signs of non-performance, the objective is not to continue waiting, but to move promptly to legal action. This allows the situation to be formally documented and minimizes the risk of asset dissipation.
Wartime Considerations
The wartime conditions in Ukraine impose additional constraints that must be taken into account when planning the recovery of funds. In particular, foreign exchange regulations are in place that restrict the transfer of funds outside Ukraine. This directly affects the final stage—the actual receipt of recovered amounts by the creditor. At the same time, in practice, there are effective mechanisms that allow the process to be structured in a manner that ensures the recovery remains both feasible and legally compliant.
Case Study from Our Practice
A foreign company entered into a contract with a Ukrainian counterparty for the supply of timber. During the negotiation stage, business activity was actively demonstrated: production facilities, logging processes, and material preparation were presented. This created a level of trust and served as the basis for making an advance payment.
Following receipt of the funds, the delivery did not take place. Communication formally continued, but was reduced to repeated explanations and postponements of deadlines. For an extended period (over three years), the counterparty referred to objective circumstances, including the impact of the war.
Once legal work on the matter commenced, a verification of the debtor’s actual business activity was conducted. It was established that the declared production and logging operations had never existed. Accordingly, the contractual obligations had no real economic basis for performance from the outset. As part of the case, court proceedings were initiated to terminate the contract and recover the advance payment. The court upheld the client’s position and granted the claim for recovery.
This case illustrates a typical scenario in which, on a formal level, the situation appears to be a standard breach of contract, whereas in substance it reflects a pattern of conduct where performance was never intended. The full court decision is available in the state register.
Following receipt of the funds, the delivery did not take place. Communication formally continued, but was reduced to repeated explanations and postponements of deadlines. For an extended period (over three years), the counterparty referred to objective circumstances, including the impact of the war.
Once legal work on the matter commenced, a verification of the debtor’s actual business activity was conducted. It was established that the declared production and logging operations had never existed. Accordingly, the contractual obligations had no real economic basis for performance from the outset. As part of the case, court proceedings were initiated to terminate the contract and recover the advance payment. The court upheld the client’s position and granted the claim for recovery.
This case illustrates a typical scenario in which, on a formal level, the situation appears to be a standard breach of contract, whereas in substance it reflects a pattern of conduct where performance was never intended. The full court decision is available in the state register.
Frequently Asked Questions
Yes, we work with clients throughout Ukraine. The location of the court does not prevent us from effectively protecting your rights and interests. We participate in court hearings by video conference and promptly receive procedural documents through the Ukrainian "Electronic Court" system, which allows us to provide full legal representation and support in cases pending in any region of Ukraine.
In most cases, what is described as a company having “disappeared” does not mean an actual liquidation of the business, but rather a breakdown in communication: the Ukrainian counterparty ceases to respond to inquiries, delays engagement, or ignores the creditor altogether.
At the same time, the legal entity often continues to exist and may remain operational. Formally, it retains its status as a market participant—entering into contracts, receiving payments, and interacting with other counterparties.
From a practical standpoint, this distinction is critical. Lack of communication does not equate to the absence of the company. In many instances, at this stage the debtor may continue to accumulate assets or redistribute them among affiliated entities.
The prospects of recovery in such situations depend primarily on two factors: the existence of assets and the debtor’s actual business activity. If the company remains operational, generates revenue, and participates in economic activity, this creates a tangible basis for recovery, including through interim measures and enforcement proceedings.
It should also be taken into account that the absence of readily identifiable assets at the initial stage does not necessarily render recovery efforts ineffective. Assets may be identified at a later stage through financial tracing, analysis of related parties, or within the framework of enforcement proceedings.
Accordingly, a company’s “disappearance” does not in itself preclude recovery. The decisive factor is not the debtor’s communication behavior, but its actual economic condition and the availability of resources to satisfy its obligations.
At the same time, the legal entity often continues to exist and may remain operational. Formally, it retains its status as a market participant—entering into contracts, receiving payments, and interacting with other counterparties.
From a practical standpoint, this distinction is critical. Lack of communication does not equate to the absence of the company. In many instances, at this stage the debtor may continue to accumulate assets or redistribute them among affiliated entities.
The prospects of recovery in such situations depend primarily on two factors: the existence of assets and the debtor’s actual business activity. If the company remains operational, generates revenue, and participates in economic activity, this creates a tangible basis for recovery, including through interim measures and enforcement proceedings.
It should also be taken into account that the absence of readily identifiable assets at the initial stage does not necessarily render recovery efforts ineffective. Assets may be identified at a later stage through financial tracing, analysis of related parties, or within the framework of enforcement proceedings.
Accordingly, a company’s “disappearance” does not in itself preclude recovery. The decisive factor is not the debtor’s communication behavior, but its actual economic condition and the availability of resources to satisfy its obligations.
At the preliminary assessment stage, only assets subject to state registration can be identified. This primarily includes real estate and vehicles—data that is accessible through public registries and provides a baseline understanding of the debtor’s formally registered assets.
At the same time, a significant portion of relevant information remains unavailable. It is not possible to directly determine the existence of funds in bank accounts, as such information is protected by banking secrecy. In practice, however, cash held in bank accounts is often the primary source of actual recovery.
This information gap is partially addressed through the analysis of indirect indicators. The presence of funds can be assessed based on the debtor’s actual business activity: whether the company is operational, whether it conducts sales, the level of counterparty engagement, how payment flows are structured, and which legal entities are involved. In practice, more applied methods are also used—such as testing the company’s responsiveness through simulated client inquiries, as well as on-site visits to evaluate the existence of real operations.
While such analysis does not provide precise data on the volume of assets, it allows for a reasoned assessment of whether the debtor is conducting genuine business activity and generating cash flow.
Accordingly, the absence of identifiable assets in public registries does not in itself mean that recovery prospects are lacking. The decision to initiate legal proceedings should be made based on a combination of factors, including the debtor’s conduct and indications of ongoing business activity that may point to the availability of resources to satisfy a court judgment.
At the same time, a significant portion of relevant information remains unavailable. It is not possible to directly determine the existence of funds in bank accounts, as such information is protected by banking secrecy. In practice, however, cash held in bank accounts is often the primary source of actual recovery.
This information gap is partially addressed through the analysis of indirect indicators. The presence of funds can be assessed based on the debtor’s actual business activity: whether the company is operational, whether it conducts sales, the level of counterparty engagement, how payment flows are structured, and which legal entities are involved. In practice, more applied methods are also used—such as testing the company’s responsiveness through simulated client inquiries, as well as on-site visits to evaluate the existence of real operations.
While such analysis does not provide precise data on the volume of assets, it allows for a reasoned assessment of whether the debtor is conducting genuine business activity and generating cash flow.
Accordingly, the absence of identifiable assets in public registries does not in itself mean that recovery prospects are lacking. The decision to initiate legal proceedings should be made based on a combination of factors, including the debtor’s conduct and indications of ongoing business activity that may point to the availability of resources to satisfy a court judgment.
Initiating criminal proceedings is appropriate in cases where the counterparty’s conduct indicates elements of initial fraud, rather than a standard breach of contract.
Such indicators include the absence of actual resources necessary to perform the obligations, the fictitious nature of the business activity, and the provision of false information regarding the existence of production facilities, personnel, or goods.
The decisive factor is not the mere fact of delay or refusal to perform, but the circumstances at the time the funds were received. If the company lacked the capacity to fulfill the contract from the outset and simultaneously created the appearance of genuine operations, this may indicate an intent to misappropriate funds.
Additional indicators may be observed in the post-payment conduct: cessation of communication, absence of any meaningful steps toward performance, coupled with the continued appearance of business activity (for example, accepting new orders).
At the same time, it is essential to draw a clear distinction: non-performance of a contract, in itself, does not constitute a criminal offense. Grounds for initiating criminal proceedings arise only where there is a combination of factors demonstrating that the obligation was never intended to be performed at the time it was undertaken.
Such indicators include the absence of actual resources necessary to perform the obligations, the fictitious nature of the business activity, and the provision of false information regarding the existence of production facilities, personnel, or goods.
The decisive factor is not the mere fact of delay or refusal to perform, but the circumstances at the time the funds were received. If the company lacked the capacity to fulfill the contract from the outset and simultaneously created the appearance of genuine operations, this may indicate an intent to misappropriate funds.
Additional indicators may be observed in the post-payment conduct: cessation of communication, absence of any meaningful steps toward performance, coupled with the continued appearance of business activity (for example, accepting new orders).
At the same time, it is essential to draw a clear distinction: non-performance of a contract, in itself, does not constitute a criminal offense. Grounds for initiating criminal proceedings arise only where there is a combination of factors demonstrating that the obligation was never intended to be performed at the time it was undertaken.
Yes, it is possible. Your personal presence in Ukraine is not required.
All work on the matter—from the initial case assessment to court representation—is carried out remotely on the basis of a power of attorney or an адвокат’s warrant. Documentation is executed remotely, and we handle all interaction with the courts and other authorities on your behalf.
Where necessary, we also manage all communication with the counterparty: issuing formal claims, participating in negotiations, recording positions, and responding to correspondence.
In practical terms, the process is structured so that you retain full control over the matter and decision-making without the need to travel to Ukraine, while all legal and administrative actions are handled on our side.
All work on the matter—from the initial case assessment to court representation—is carried out remotely on the basis of a power of attorney or an адвокат’s warrant. Documentation is executed remotely, and we handle all interaction with the courts and other authorities on your behalf.
Where necessary, we also manage all communication with the counterparty: issuing formal claims, participating in negotiations, recording positions, and responding to correspondence.
In practical terms, the process is structured so that you retain full control over the matter and decision-making without the need to travel to Ukraine, while all legal and administrative actions are handled on our side.
Submit a request for a legal consultation. During the conversation, we'll clarify the circumstances of your situation, identify possible courses of action, and provide clear, comprehensive answers to your questions. If our view of the next steps aligns, we'll sign an agreement and begin working on your case. If not, you'll still receive practical, well-founded recommendations to help you navigate your legal matter.