The Ministry of Economic Development has proposed a new mechanism for preventing bankruptcy

10 jun 2022

Stanislav Gavrichkov, Senior partner of the Law Office of St. Petersburg "Main Letter", gave his comment on this matter.

The Ministry of Economic Development has proposed to introduce in Russia a new mechanism for preventing bankruptcy of debtors — an agreement on pre-trial rehabilitation.

It is assumed that the rehabilitation will help to avoid the costs associated with the bankruptcy procedure, as well as provide an opportunity to receive a tax deferral. During the validity of the agreement on pre-trial rehabilitation, the enforcement proceedings initiated against the debtor should be terminated and a ban on the initiation of new ones should be introduced.

The agreement (at the request of the debtor) may be approved by the arbitration court, provided that creditors who own more than 75% of the debtor's obligations participated in its conclusion, the debtor has no current debts (alimony, salaries, severance payments), and the agreement itself is aimed at restoring its solvency.

The effect of the rehabilitation applies to all debts, even if some of the creditors did not appear, which is a fundamental difference from the existing procedure for concluding a settlement agreement provided for in Chapter 8 of the Bankruptcy Law and gives another chance to the debtor to avoid bankruptcy, Stanislav Gavrichkov notes.

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