Bankruptcy and Anti-Сrisis Protection of Business

Bankruptcy and Anti-Сrisis Protection of Business

Bankruptcy does not mean saying goodbye to the affected business, but is rather a tool that allows it a fresh start. We see our mission as being not only to provide effective legal support during rehabilitation and liquidation procedures, but also in the course of a company’s daily operations in order to exclude regulatory risks.   Legal-500-leading-firm-2020.jpg

Pepeliaev Group safeguards the interests of everyone involved in insolvency proceedings. In addition to projects in Russia, we also provide legal support in cross-border proceedings, when a debtor and its assets (or creditors) are located in different jurisdictions. Having professional lawyers involved in the process is crucial, for there is almost no regulation of bankruptcy proceedings involving a foreign element at the national level.

One of the key advantages of Pepeliaev Group is the ability to engage other practice groups of the firm to work on projects to solve complex business tasks and take into account the operational specifics of the client and its debtor counterparties. 

Key areas in which our Bankruptcy and Anti-Crisis Protection of Business Practice operates

The management of insolvency risks is an integral part of securing a company’s own economic security. 

Our services:

  • support for and preliminary assessment of risks associated with transactions involving companies showing signs of insolvency;
  • legal support during auctioning of assets sold in bankruptcy;
  • debt restructuring;
  • improving a business structure;
  • assessing a company’s compliance risks and drawing up recommendations for organising corporate procedures applicable to the requirements of insolvency legislation and the associated liability for non-compliance;
  • legal support when there is a risk of a corporate takeover using the bankruptcy mechanism.

When we represent clients, our support is either comprehensive or involves resolving specific business tasks 

  • assessing the legal grounds for and submitting a bankruptcy petition relating to a counterparty;
  • legal support when a court-appointed administrator is appointed and providing support to the administrator;
  • providing support in the context of having claims included in a debtor's register of creditors' claims;
  • preventing falsified claims of creditors from being included in the register;
  • defending and challenging the debtor's transactions;
  • recovering illegally divested assets; 
  • recovering accounts receivable.      

Often projects are not restricted to one specific country, but rather involve several jurisdictions

Thanks to Pepeliaev Group’s professional connections with leading foreign law firms and its own private international law specialists, we successfully provide legal services associated with cross-border bankruptcy:      

  • we provide support to foreign creditors when their Russian debtors are insolvent (and also to Russian creditors when their foreign debtors are insolvent);
  • we represent clients when the debtor’s property is located abroad;
  • we provide support during recognition of foreign bankruptcies and enforcement of international court decisions;
  • we advise on conflict-of-law rules and the applicable legislation.

Where regulations on insolvency apply, our Bankruptcy practice provides support in the field of administrative law      

  • initiating the process for court-appointed administrators to face administrative liability
  • initiating the process for a director of the debtor to face liability in the case of a fictitious or deliberate bankruptcy or when a petition initiating the relevant procedure was not filed;
  • defending companies and their officers before administrative authorities and in courts of all levels;
  • drafting expert opinions in the area of administrative law defence of business.

We provide the following services jointly with lawyers of our criminal law practice:

  • initiating criminal proceedings in relation to existing elements of a crime in the area of bankruptcy;
  • providing representation before law enforcement authorities and courts of all levels;
  • drafting expert opinions on defending the business in the area of criminal law defence of business.


Pepeliaev Group’s lawyers have prevented secondary liability worth RUB 4.45 billion from being imposed on a client The lawyers of Pepeliaev Group’s Bankruptcy and Anti-Crisis Protection of Business Practice have prevented secondary liability worth RUB 4.45 billion from being imposed on a client. 
Within the framework of a bankruptcy case involving a major company in the Far East, a claim was filed with the Russian Federal Tax Service for secondary liability to be imposed on the managers and founders of the debtor company as well as on the persons whom the tax authority treated as the beneficiaries and beneficial owners of the bankrupt taxpayer.

The lawyers of Pepeliaev Group’s Bankruptcy and Anti-Crisis Protection of Business Practice have successfully protected the client in courts of all instances, managing to prove that the client was not a beneficiary or an entity controlling the debtor, while the client did not obtain any funds unlawfully withdrawn from the debtor. As a result, the client’s assets worth RUB 4.45 have been preserved and its business reputation has been protected.

“The project was complex specifically because our task was to overcome the negative conclusions contained in the two court decisions that have come into force that tax liability be imposed on the debtor," commented Yulia Litovtseva, the Head of our Bankruptcy and Anti-Сrisis Protection of Business Practice. "And we have successfully fulfilled this task.”
Pepeliaev Group has successfully defended a major foreign bank in a case concerning the deduction of expenses relating to futures transactions for profit tax purposes

At the end of November 2015, a tax authority handed down a decision based on the results of a field tax audit of a foreign bank. The authority went back on a point that had previously been demonstrated in terms of expenses relating to futures transactions being legitimately deducted from the tax base for profit tax. Including fines, the amount claimed was more than RUB 300 million.

Pepeliaev Group represented the taxpayer through senior partner Ivan Khamenushko PhD and senior associate Lyudmila Merkulova PhD.

At the stage of the administrative challenge to the tax authority's decisions, Pepeliaev Group's client successfully put forward a number of arguments to substantiate its position that the expenses were deducted legitimately and to justify the procedure by which it had accounted for the futures transactions. Thus, the fact that parties to a transaction are related is not in itself a reason to challenge whether expenses under the transaction are economically justified. It is only one of the grounds for control over prices. Moreover, the conclusions of the tax inspectors were based on their substituting a challenge as to whether transactions were genuine in place of checking whether they were economically justified (what the business purpose was). Further, the tax authority also wrongly concluded that completed transactions were inefficient or economically unjustified. This was because, when the tax inspectors determined the final financial result, they failed to take into consideration a substantial part of the income the company generated in the form of an unrealised exchange rate difference. The Russian Central Bank has confirmed that this may be taken into account.

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