Sergey Borodin: "A moratorium on bankruptcy will provide a deferral of payment of the debts, but not a cancellation of them."

The deputies often raise the question of toughening the punishment for intentional bankruptcy. How do you assess the problematic nature of this area, and what measures, in your opinion, should be taken?

S.B: Bankruptcy is the only legal way to get rid of the debts. However, the exemption should not affect the conscientious creditors. One of the urgent problems today is the attempt of the debtors to avoid the debt repayment by all means: by withdrawal of the assets, attempts to initiate managed bankruptcies, re-registration of their property to relatives or friends. Bankruptcy can also be used as a way to restructure a business - to buy out the property of a bankrupt at a lower price, and to cancel all the debts.

Basically, the company executives are held accountable for intentional bankruptcy. However, according to the Ministry of Internal Affairs for 2018-2019, only about 80 people went through the cases of deliberate and fictitious bankruptcy.

One of the main problems of this area is the difficulty in establishing and proving all the circumstances of the crime, as well as the guilt of the persons. At the same time, the ministry emphasizes that deliberate bankruptcy can be often qualified differently, for example, as fraud or misappropriation and embezzlement.

Probably, there are more effective measures, aimed at the protection of interests of the creditors - not just tougher penalties, but the mechanisms to prevent bankruptcy, creating more effective ways for creditors to control the actions of the debtors. In the bankruptcy procedure, no one has enough money as a rule. The solution for this problem might be a controlled reformatting of the debtor's activity in order to keep on the work of the enterprise and have an opportunity to earn money for the debts repayment. 

On March 12, a new draft law, regarding the activities of the arbitration managers, was published. Many of them expressed their opinion on it and stated that the measures in it were rather tough and unfair. What is your opinion about this?

S.B: Arbitration managers are in the unenviable position now. Their professional activities are under constant supervision and control not only by the Rosreestr administration, but also by persons, involved in the bankruptcy cases, by the court and by the self-regulatory organizations.

Almost any violation, even without causing losses, may be the basis for holding managers accountable up to disqualification and deprivation of the right to work for a certain period of time. Under such conditions, the manager is often forced to act, primarily, on the basis of ensuring his or her safety, which does not always reflect well on the interests of the creditors and the debtor.

The proposed draft law can hardly be called loyal to the managers, as their activities will again be complicated. For example, the manager can be disqualified not only for the violations, committed by him or her, but also as a result of the liquidation of the self-regulatory organization he or she belongs to.

In addition, it is proposed to reconsider the principle of appointing managers, which may lead to unpredictability of the results of work for each specific procedure.

The managers will be randomly appointed on the basis of a personal rating, and their remuneration will be reconsidered towards the fixed one. Moreover, it will not be paid on a monthly basis, but only after the procedure is completed.

Under such circumstances, the risks of managers increase significantly, and the amount of remuneration, which is not high, may decrease further. This will lead to increased dependence of managers on the "customers" in bankruptcy cases.

Should Russia expect massive bankruptcies due to the collapse of the national currency and the coronavirus? What areas will suffer most?

S.B: The number of bankruptcies, especially the bankruptcies of the individuals, has been growing in recent years. Among the reasons there are a high level of debt and the need to work in fairly difficult economic conditions. At the same time, about 70% of companies come “cleared” to the bankruptcy procedure, i.e. without any property or other assets.

The year of 2020 will not be an exception - the number of bankruptcies will not decline. It is probable that in the current situation, all sectors of the economy will be affected.

It will be difficult enough for the services and sales sector - people try to move less, they do not go to the fitness centers or large stores, and stop planning long trips.

All this can lead to an increase in the number of cases of insolvency, but many entrepreneurs are preparing anti-crisis measures and plans, that is why we do not expect a total fall of the business into the bankruptcy.

Under what conditions the tourism, airlines and hotels will be getting out of the situation with minimal losses and how can they avoid bankruptcies?

Many companies (for example, ZARA) have begun to close their stores temporarily. Will the temporary measures grow into the permanent ones?

S.B: I think that the largest international companies will survive this crisis. Nevertheless, they have support of the foreign markets, and if the economic situation improves, closed stores and offices will be able to resume their work. However, even they will have to adapt to the changing situation so as not to lose their segment. For example, “Auchan” company plans to introduce new services for the customers and develop online sales.

How do you assess the prospects for 2020, regarding bankruptcies in Russia and in the world? Will at least someone be able to get away with it?

S.B: The statistics on an increase in bankruptcy procedures is implacable. But who will stay afloat, is another question. Russia has already gone through more than one crisis, and every time it led both to the new market falls and to the search for new opportunities, from which a successful business was growing.

The new bankruptcies cannot be avoided, neither in Russia, nor in the world market. But some people face the problem of bankruptcy more than once in their career – for example, Donald Trump's business suffered the from the bankruptcy several times.

Therefore, in 2020, we expect productive work, aimed at preserving assets and finding ways out of the crisis in the area of bankruptcies.