What “accelerated bankruptcy” of foreign companies might look like

by time news

Lawyer of the “Regionservice” collegium Stanislav Sobolev believes that these mechanisms “are only possible ways to build relationships with foreign partners.” Since foreign companies, if they do go bankrupt, then at the location of the center of main interests – outside the Russian Federation, therefore, apparently, we are talking about the future of Russian companies in which foreign persons own this or that share, Mr. Sobolev notes. That is, based on this, Andrey Belousov’s “three options” are outlines of a position on issues of subsidiaries or established as a joint venture, for example, Sakhalin oil and gas projects. “Most likely, when implementing the scenarios outlined, the authorities and business will be guided by the existing legal mechanisms, although emergency lawmaking to facilitate their implementation cannot be ruled out,” says Andrey Ryabinin, head of international practice at the Delcredere Bar Association. Alexandra Alfimova, Senior Associate at Savina Legal’s Bankruptcy and Restructuring Practice, does not rule out that the continued operation of companies subject to sanctions restrictions will be regulated by existing legislation, adjusted for the corresponding “additional regulation”, which will be created mainly by executive authorities and courts.

In the case of “accelerated bankruptcy”, the usual bankruptcy procedure may be meant, Mr. Ryabinin believes, but with an early transition to external management or bankruptcy proceedings, which imply the replacement of the company’s management with an arbitration manager to establish full operational control over the enterprise (under the control of creditors and the court ). To do this, the courts may be instructed to consider such bankruptcy applications as a matter of priority and as soon as possible, he believes. Other lawyers admit that they meant simplified bankruptcy procedures, which involve the transition immediately to bankruptcy proceedings without the introduction of a monitoring procedure. “Bankruptcy cases of absent debtors or liquidated companies are considered in a simplified procedure,” adds Anton Kravchenko. “An absent debtor is when the company has actually ceased operations, and its head is absent or it is not possible to establish his location,” says Ms. Alfimova. “Bankruptcy through liquidation (the decision on it is made by shareholders) makes it possible for the liquidator to apply to the court for bankruptcy and introduce bankruptcy proceedings in the company. Within its framework, the debtor’s property is sold at auction, transactions may be contested and other measures aimed at replenishing the bankruptcy estate and making settlements with creditors are carried out,” explains Marina Morozova, partner of ProLegals. “The procedures for monitoring, financial recovery and external management are not applied here.”

As for the deliberate bankruptcy mentioned by the Deputy Prime Minister, the law provides for subsidiary liability of persons controlling the debtor for bringing the company to bankruptcy, as well as criminal liability under Art. 196 of the Criminal Code of the Russian Federation, emphasizes Mrs. Morozova.

Alena Bachinskaya does not exclude that another option may be to amend the law, allowing the state, for example, through the Federal Tax Service, to initiate the bankruptcy of companies upon the occurrence of certain conditions without objective signs of bankruptcy: this may be the termination of the company’s activities in Russia, the reduction of the entire staff, or most of it. We note, however, that in this case such a mechanism can hardly be focused only on foreign companies. On the one hand, given the widespread ownership of business assets in Russia through foreign, including offshore, chain jurisdictions, the problem of separating “real foreigners” from ordinary Russian owners who liquidate a business for their own reasons becomes almost insoluble, and therefore manipulations are possible. almost any procedure invented by the government to protect the Russian market from sanctions, which is what we are talking about in the end. On the other hand, for the market both in the Russian Federation and outside it, in essence, there is no difference between leaving the market for political and commercial reasons – the threat of “accelerated bankruptcy” will obviously be used by foreign companies that have the opportunity to be present in one form or another. in Russia, as a way to knock out maximum preferences, including competitive ones, from the power structures of the Russian Federation in relation to their business. It should be noted that for Yugoslavia under sanctions in the 1990s, this process was very common and, apparently, became one of the most common channels for large-scale corruption.

Anna Zanina, Dmitry Butrin

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