Bankruptcy and Anti-Сrisis Protection of Business

The Russian Constitutional Court has acknowledged the right of insurers to participate in disputes regarding court-appointed administrators to be held liable

The Russian Constitutional Court has adopted Resolution No. 30-P dated 5 June 2023. The Constitutional Court has checked whether article 35(2) of the Bankruptcy Law complies with the Constitution to the extent of how in legal practice the right was not recognised of an insurance company to participate in a dispute regarding the acts or omissions of a court-appointed administrator where no claim for losses to be recovered from the administrator has been asserted.

Clarifications of the Russian Supreme Court with respect to provisional remedies

The Plenum of the Russian Supreme Court has adopted Resolution No. 15 dated 1 June 2023 dedicated to provisional remedies. At the same time, resolution No. 55 of the Plenum of the Supreme Commercial Court dated 12 October 2006 “On how commercial courts apply provisional remedies” has been repealed.

The register of secondary respondents set up by the Federal Tax Service The Russian Federal Tax Service has launched a new service for searching for information regarding controlling persons who have been held liable under civil law. 

Temporary management of property of foreign persons

25 April 2023 the Russian President signed the Decree “On the temporary management of certain property”.

Draft law on the extraordinary fulfillment of obligations aimed at preventing disasters A draft law ‘On amending articles 126 and 134 of Federal Law “On insolvency (bankruptcy)”’ has been put before the State Duma. The draft law was triggered by Resolution No. 4-P of the Russian Constitutional Court dated 1 February 2022, adopted following a claim of PJSC T Plus which was drafted by Pepeliaev Group’s bankruptcy and anti-crisis protection of business Practice.

The risks are increasing for stakeholders that are investors

Pepeliaev Group advises that in August 2022 the Russian Supreme Court issued a Ruling confirming the court practice of the lower courts in the area of shared construction that investors who are individuals are deprived of the benefits in the event of the developers’ bankruptcy when residential premises are acquired for investment purposes.

The draft law on external administration of companies with foreign membership The draft law No. 104796-8 “On external administration for the management of a company” has been put before the State Duma.

Moratorium on bankruptcy

The purpose of the moratorium is to support citizens, individual entrepreneurs and companies which have found themselves in a difficult financial position after sanctions were imposed on Russia.

Draft law on the external management of companies associated with hostile states Pepeliaev Group advises that the Ministry of Economic Development, in accordance with the instructions of the Russian Government dated 8 March 2022, has prepared a draft law “On an external administration for the management of a company”.

The Russian Central Bank has introduced a procedure for maintaining a register of controlling persons for credit institutions, insurance companies and public pension funds Pepeliaev Group advises that on 26 July 2021 the Russian Central Bank’s Instruction No. 5814-U dated 9 June 2021 came into legal force regarding the form, procedure and deadlines for submitting information to the Bank of Russia about controlling persons of financial institutions, and the procedure for the Bank of Russia to maintain the list of such persons.

Criminal liability has been made harsher in the bankruptcy sphere Pepeliaev Group advises that a criminal liability has been made harsher for beneficial owners and other controlling persons, as well as court-appointed administrators for their unlawful activities during a bankruptcy and for deliberate bankruptcy.

The Russian Constitutional Court has allowed foreclosure on the only residential property of a bankrupt individual Pepeliaev Group advises that the Constitutional Court’s Resolution No. 15-P was published on 26 April 2021. The Resolution determines whether the only residential property should be excluded from the bankruptcy estate where such property belongs to an individual debtor and exceeds the property that is reasonably sufficient for satisfying the need for residential property established by the Constitution.