Russia introduces bankruptcy moratorium

A ban on initiating bankruptcy cases by creditors will again start in Russia on April 1, 2022 and will last at least for six months.  The measure may be applied to both organizations and individual entrepreneurs, including issues of insolvency of individuals.  The head of the Cabinet of Ministers Mikhail Mishustin announced the introduced norm the day before.

According to the official, the measure will allow debtors to recover from difficulties and find other sources of income without resorting to closing their businesses and laying off the employees, RBC reports.

The Prime Minister expressed hope that this would help businesses and citizens to improve the state of affairs in the situation of imposing sanctions against Russia.

The only sector that turned out to be outside the moratorium is the sector of construction of apartment buildings and other real estate as part of equity participation. Such developers-debtors do not fall under the introduced norm and during the moratorium period they may find themselves in insolvency proceedings at the initiative of their creditors.

Previously, a large-scale moratorium on the initiation of bankruptcy cases was introduced by the government in 2020 against the backdrop of the economic consequences of the pandemic. Then the number of insolvency cases decreased by 20% compared to the previous year. The number of recorded intentions to initiate procedures also decreased by 8.3%.