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We know everything about bankruptcy
24/11/2024
Sunday
THIS DAY IN HISTORY:
24 November 
1970 The United States and the USSR ratified the nuclear non-proliferation treaty.
1970 The Central Committee of CPSU restored the national autonomy of the Kalmyks, Karachais, Balkars, Chechens and Ingush.
1970 Charles Darwin published The Origin of Species - the first edition was sold out in a day.
24 November
1970 The United States and the USSR ratified the nuclear non-proliferation treaty.
1970 The Central Committee of CPSU restored the national autonomy of the Kalmyks, Karachais, Balkars, Chechens and Ingush.
1970 Charles Darwin published The Origin of Species - the first edition was sold out in a day.
Six-month bankruptcy moratorium will be introduced in Russia
Russian government is developing plans on how to support the country's economy in the current geopolitical circumstances. One of the measures in connection with the imposed sanctions may be a temporary ban on creditors to initiate bankruptcy cases.
According to Izvestia, the moratorium may last up to six months. In the non-final version of the plan, developed by the executive branch and received by media outlet, we are talking about both legal entities and individuals.
An exception to this list may be individual debtors, the register of which will be approved directly by the Government of the Russian Federation. Most likely, experts suggest, we are talking about those foreign firms and individuals who left the country, having completely stopped work and left labor collectives and property of enterprises to the mercy of fate.
At the same time, the experts are quite critical of the proposed solution. In particular, comparing the idea of introducing a bankruptcy ban now with the moratorium that was introduced during the pandemic. Experts believe that a wave of delayed bankruptcies is inevitable. Moreover, before, the moratorium applied only to those business sectors that were recognized as the most affected by the consequences of the pandemic by the state.
According to the expert, this step will help those companies that "plan to continue their activities in Russia, wait out the crisis and pay debts to creditors later." It is quite logical that legal entities will face financial problems due to sanctions.
“Over the previous year, 94.9% of bankruptcy applications came from the debtors themselves. Lenders rarely initiate proceedings expecting interest and penalties to accrue. Therefore, the moratorium will not reduce the number of bankruptcies of individuals. On the contrary, due to the current economic situation, a sharp increase in bankrupt citizens is expected,” Gorbachevsky added.
According to Izvestia, the moratorium may last up to six months. In the non-final version of the plan, developed by the executive branch and received by media outlet, we are talking about both legal entities and individuals.
An exception to this list may be individual debtors, the register of which will be approved directly by the Government of the Russian Federation. Most likely, experts suggest, we are talking about those foreign firms and individuals who left the country, having completely stopped work and left labor collectives and property of enterprises to the mercy of fate.
Initially, it was assumed that the moratorium may be introduced from the beginning of March and extended until the end of 2022.
However, in the end, it was decided to shorten the term. At the same time, the developers of the draft moratorium believe that it will allow entrepreneurs to adapt to changing market conditions.At the same time, the experts are quite critical of the proposed solution. In particular, comparing the idea of introducing a bankruptcy ban now with the moratorium that was introduced during the pandemic. Experts believe that a wave of delayed bankruptcies is inevitable. Moreover, before, the moratorium applied only to those business sectors that were recognized as the most affected by the consequences of the pandemic by the state.
Now we are talking about all sectors of the economy without exception.
Evgeny Gorbachevsky, director of the federal financial and legal company ‘Debt Expert’, told Rusbankrot that the moratorium planned by the government will be applied exclusively to creditors who “are deprived of the opportunity to file bankruptcy petitions for up to six months. The company or individual, as before, will be able to independently initiate the procedure.”According to the expert, this step will help those companies that "plan to continue their activities in Russia, wait out the crisis and pay debts to creditors later." It is quite logical that legal entities will face financial problems due to sanctions.
A temporary ban on creditors from filing for bankruptcy will not force firms into bankruptcy and will give them time to get back on their feet.
“According to a rough estimate,” Yevgeny Gorbachevsky noted, “the moratorium will reduce the number of bankruptcies of legal entities by 1.5-2 times.” At the same time, those companies that are ready to close their business and declare themselves bankrupt will not need a moratorium and they will be able to refuse it. As for individuals, according to the expert, the moratorium will not be particularly effective for them.“Over the previous year, 94.9% of bankruptcy applications came from the debtors themselves. Lenders rarely initiate proceedings expecting interest and penalties to accrue. Therefore, the moratorium will not reduce the number of bankruptcies of individuals. On the contrary, due to the current economic situation, a sharp increase in bankrupt citizens is expected,” Gorbachevsky added.
17.03.2022
