How to use a bankruptcy moratorium to save a business
04 apr 2022
On April 1, a bankruptcy moratorium came into effect, which will last until October 1, 2022, follows from the text of the government decree. During this period, creditors will not be able to apply to the court for bankruptcy of any legal entity, citizen or individual entrepreneur. It will be possible to bankrupt only debtors-developers, if the property has already been entered in the register of problematic objects.
"In fact, the moratorium will give debtors the opportunity to cope with current difficulties within six months, to set up their affairs, find new sources of income and strengthen finances, without closing companies or businesses, without firing employees," said Prime Minister Mikhail Mishustin.
Interest protection
The Government in its resolution did not indicate the difference between the new moratorium and the previous one. Therefore, all clarifications and rules that were in effect two years ago remain relevant.
During the period of the moratorium, the affected persons will not be charged interest for the use of other people's funds (Article 395 of the Civil Code), a penalty (Article 330 of the Civil Code), tax penalties (Article 75 of the Tax Code) and other financial sanctions will not be imposed. This and other clarifications were contained in the relevant resolution of the Plenum of the Supreme Court (more details — Bankruptcy Moratorium: explanations of the Plenum of the Supreme Court). It is also prohibited to set off claims against the debtor if the bankruptcy order of performance of obligations is violated.
The moratorium does not deprive creditors of the opportunity to file claims against the debtor, does not prevent the seizure of property and other interim measures.
Debtors themselves can still apply for their own bankruptcy. But they are relieved of the obligation to file for bankruptcy if they have signs of insolvency (sub-item 1, paragraph 3, Article 9.1 of the law "On Bankruptcy"). Accordingly, there will be no penalties for such failure, managers and beneficiaries will not be held vicariously liable if the business eventually goes bankrupt. A different approach is applied if the grounds for filing an application by the bankrupt himself arose before the start of the moratorium.
How to use a bankruptcy moratorium to save a business
On April 1, a bankruptcy moratorium came into effect, which will last until October 1, 2022, follows from the text of the government decree. During this period, creditors will not be able to apply to the court for bankruptcy of any legal entity, citizen or individual entrepreneur. It will be possible to bankrupt only debtors-developers, if the property has already been entered in the register of problematic objects.
"In fact, the moratorium will give debtors the opportunity to cope with current difficulties within six months, to set up their affairs, find new sources of income and strengthen finances, without closing companies or businesses, without firing employees," said Prime Minister Mikhail Mishustin.
Interest protection
The Government in its resolution did not indicate the difference between the new moratorium and the previous one. Therefore, all clarifications and rules that were in effect two years ago remain relevant.
During the period of the moratorium, the affected persons will not be charged interest for the use of other people's funds (Article 395 of the Civil Code), a penalty (Article 330 of the Civil Code), tax penalties (Article 75 of the Tax Code) and other financial sanctions will not be imposed. This and other clarifications were contained in the relevant resolution of the Plenum of the Supreme Court (more details — Bankruptcy Moratorium: explanations of the Plenum of the Supreme Court). It is also prohibited to set off claims against the debtor if the bankruptcy order of performance of obligations is violated.
The moratorium does not deprive creditors of the opportunity to file claims against the debtor, does not prevent the seizure of property and other interim measures.
Debtors themselves can still apply for their own bankruptcy. But they are relieved of the obligation to file for bankruptcy if they have signs of insolvency (sub-item 1, paragraph 3, Article 9.1 of the law "On Bankruptcy"). Accordingly, there will be no penalties for such failure, managers and beneficiaries will not be held vicariously liable if the business eventually goes bankrupt. A different approach is applied if the grounds for filing an application by the bankrupt himself arose before the start of the moratorium.
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