THE MORATORIUM ON BANKRUPTCY: 10 RULES YOU NEED TO KNOW

Among these enterprises, there are companies from the sectors, most affected by the coronavirus pandemic, as well as backbone enterprises and strategic organizations. It is possible to check whether the company is included in the list by OGRN or TIN, using the service on the website of the tax office.

Despite the outward clarity of the initiative, there is a number of frequently asked questions that we tried to answer in this article.

1. The bankruptcy moratorium applies only to the new bankruptcies; the cases, previously initiated by the court, will be considered in a general manner.

2. A debtor, who is on the list, has a right to file for bankruptcy himself (herself); a moratorium just gives him/her immunity from the creditors.

3. The moratorium extends to the obligation of the founder of the debtor to file for bankruptcy if there are signs of bankruptcy, i.e., during the moratorium it is impossible to bring the founder to subsidiary liability for not filing a bankruptcy of his company.

4. The moratorium applies to the companies and individual entrepreneurs, for whom the main type of activity, according to ARCEA, is among those particularly affected by the pandemic; additional activities are not taken into account in this case.

5. For the period of the moratorium, the seizures of the property persist, but all penalties, including the enforcement proceedings, are suspended.

6. During the entire period of the moratorium, a participant of the company/community have no right to withdraw from it. The payment of dividends and distribution of profits are also suspended.

7. The financial sanctions, including forfeits, are not assessed for the period of the moratorium.

8. For the period of the moratorium, the company has the right to make any deals arising from its ordinary business, provided that the value of the transactions does not exceed 1% of the book value of the company's assets.

9. If during the period of the moratorium it becomes clear that the company will be bankrupt, it is necessary to negotiate with creditors and obtain written consent from them to conclude a settlement agreement and try to sign such agreements after the moratorium is lifted.

10. If the bankruptcy procedure begins within three months after the lifting of the moratorium, the law establishes a simplified procedure for concluding a settlement agreement, it is just necessary to make an agreement with the majority of creditors.