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Amendments to introduce a moratorium on bankruptcy proceedings under discussion

  • Russia

    25-03-2020

    The Ministry of Economic Development of Russian Federation has prepared a bill empowering the Russian Government to impose a moratorium on bankruptcy proceedings for certain types of companies, to be specified by the Government (the bill does not specify the list of particular type of companies).

    According to the bill, bankruptcy proceedings could be suspended for up to 6 months, but only in exceptional cases which presume, inter alia, natural or man-made emergencies, or significant change of the exchange rate of the ruble.

    As stated in the bill, in case the moratorium is introduced, courts will return (refuse to consider) any applications filed during the moratorium by creditors for debtors to be declared bankrupt. If a bankruptcy case is already initiated by the time of moratorium is introduced, the proceedings would be adjourned.

    Considering the upcoming global economic recession caused by the pandemic, this legislation could allow core suppliers of crucial products, including state procurement suppliers, to stay in operation and therefore prevent disruptions in supply lines in case their debts rapidly increase or other signs of upcoming insolvency occur.

    Currently, this legislation is under public hearings stage, which will end on 09 April, after which the bill will be presented to parliament.

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