LAWYERS URGED TO SETTLE THE LAW IN RELATION TO AU

Amendments to the Bankruptcy Law have been discussed in the professional community for several years, the topic remains relevant today. Discussing possible innovations, it is impossible not to touch upon the work of arbitration managers. The editors of Rusbankrot talked with leading lawyers and found out their opinion. Experts agreed that the law requires mitigation regarding the activities of the AU. In particular, it is worth paying attention to the financial component of the remuneration of arbitration managers and the issue of mandatory insurance.

Financial component of AU remuneration

At the moment, the main problem of the remuneration of the arbitration manager is the sources of its payment, which are often not enough, says Alexander Selyaninova, a member of the Association of Lawyers of Russia, a lawyer for Domino Legal Team. She recalled that if the debtor does not have funds and the applicant establishes a limit on the financing of the bankruptcy procedure, the AU risks not receiving the remuneration intended for it.

Her colleague Anastasia Pylaeva, lawyer, founder of PLV GROUP and also a member of the Association of Lawyers, notes that the purpose of the new draft Law on Bankruptcy is to increase the efficiency of bankruptcy procedures for individuals and legal entities by achieving transparency and optimizing the mechanisms for their implementation, as well as shifting the vector of bankruptcy legislation towards restoring the solvency of debtors.

"It is quite logical that the achievement of such global goals is impossible without changing the work process of arbitration managers – there are no imperative requirements for choosing one or another candidate for a manager in relation to a specific procedure, a low wage is established with a large personal insurance burden, etc. All this indirectly creates conditions for the low efficiency of the procedure itself with a long period of bankruptcy proceedings, as well as favorable conditions for the use of bankruptcy procedures for illegal purposes," Pylaeva stressed.

In her opinion, the amount of fixed remuneration of arbitration managers does not correspond to the market, taking into account the scope of powers and the level of personal responsibility of this person. The lawyer is sure that the fixed remuneration of the AU should be increased.

Compulsory insurance

Speaking about compulsory insurance, Dmitry Provodin, Senior partner of Bartolius Insurance Company, draws attention to the fact that this is an extremely unpleasant type of insurance and a "heavy burden" for insurance companies.

"In my opinion, a good opportunity to cancel compulsory insurance and not leave potential victims without compensation for losses may be the reform of self-government in the field of arbitration management. In particular, guarantees of full compensation for losses can be achieved at the expense of the compensation fund of the SRO (or the arbitration managers themselves) with a simultaneous significant increase in the size of the compensation fund. It would be reasonable to increase the compensation fund of the SRO tenfold and allow managers, if they have a compensation fund in the required amount, not to enter the SRO or create a legal entity and form a compensation fund on the basis of it," Provodin believes.

The expert also suggests allowing managers (legal entities of arbitration managers) with a large compensation fund to manage debtors with large assets as a bonus.

"Yes, this is, in fact, a property qualification, but this approach will protect victims and make arbitration managers more responsible," the expert added.

In turn, a member of the Association of Lawyers of Russia, Alexandra Selyaninova, notes that compulsory insurance is becoming increasingly inefficient and unprofitable for AU.

"Firstly, the amount of insurance payments is several times less than insurance premiums, which creates an additional burden on SRO funds. Secondly, insurance rates are increasing every year and are becoming a serious financial burden for AU. This leads to the unattractiveness of acquiring the status of an AU, and also adversely affects the financial situation of the SRO," Selyaninova said.

PLV GROUP expressed the opinion that it is not necessary to exclude the requirement for compulsory insurance, however, it is definitely worth reviewing the criteria for forming the amount of insurance premiums.

"The Chamber of Commerce and Industry proposed to amend these rules, replacing them with alternative insurance, the procedure and method of which should be established by the SRO independently. This proposal is connected, in our opinion, with a large financial burden on arbitration managers, with low wages in the procedures. Moreover, the amount of insurance currently depends on the number of complaints filed against the manager for previous periods – these processes are often beyond the control of managers, but greatly affect their costs. At the same time, compulsory insurance in itself makes it possible to offset those risks and losses for participants in bankruptcy procedures that may be caused by poor-quality work of the manager," the founder of PLV GROUP explained her position.

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