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.

Counterparty’s insolvency risks for creditors of state and municipal unitary enterprises Pepeliaev Group advises of specific aspects of how claims of creditors of state enterprises are satisfied at the expense of the debtor’s rights to a land plot.

Strengthening risks of liability with respect to obligations of finacial institutions Pepeliaev Group advises that, from 1 July 2021 a significant amendment is expected in terms of the regulation of the status of persons controlling the activity of credit institutions and insurance companies and non-public pension funds, and their liability.

Moratorium for bankruptcies extended until 2021

Out-of-court bankruptcy of individuals: the law has been adopted

Pepeliaev Group advises that on 1 September 2020 amendments are coming into effect to the Bankruptcy Law which provide for a new procedure of out-of-court bankruptcy of individuals.

The law on granting a court instalment plan to debtors to whom moratorium applies

Pepeliaev Group advises that on 8 June 2020 the Russian President signed the new federal law No. 166-FZ on measures to ensure the stable development of the economy and to prevent the consequences of the spread of the coronavirus. Article 9 of the federal law contains provisions granting debtors to which the moratorium applies a court instalment plan in bankruptcy cases for the purpose of settlements with creditors.

The draft law on granting a court instalment plan to debtors to whom the moratorium applies

Pepeliaev Group advises that draft law No. 953580-7 is pending its first reading in the Russian State Duma (the lower house of the Federal Assembly of Russia). Article 9 of the draft law contains provisions concerning the granting to debtors to which the moratorium applies of a court instalment plan in bankruptcy cases for the purpose of settlements with creditors.

Refusal of the moratorium: practical consequences On 17 April 2020 the State Duma in the third reading adopted draft law No. 685368-7 which introduces significant amendments to the current article 9.1 of the Bankruptcy Law, regulating the application of the moratorium on bankruptcy and other significant restrictions with respect to a wide range of persons.