Clifford Chance
What creditors should know about Russian insolvency regime – Q&As on Russian insolvency
27 May 2011
This client briefing provides answers to the questions most frequently raised by Russian and foreign investors in connection with the insolvency of their Russian corporate counterparties and gives an overview of the most provisions of the Russian insolvency regime applicable to companies.
In particular, this briefing provides a general description of the insolvency proceedings that can be commenced against a Russian company, insolvency tests which may result in the commencement of insolvency proceedings, the procedure for the initiation of insolvency proceedings and the restrictions on the debtor and its activity which are triggered by the commencement of insolvency proceedings. The briefing also explains what rights creditors generally have in a debtor's insolvency and how creditors can exercise their rights and satisfy their secured and unsecured claims in the debtor's insolvency. It also gives a general understanding of transactions that may be vulnerable in the Russian debtor's insolvency as well as outlining general principles dealing with the potential liability of the management of the debtor and its controlling persons for the debts of insolvent entities.
Most of the legislation regulating the insolvency of corporate entities in Russia is contained in the Federal Law No. 127-FZ "On insolvency (bankruptcy)" of 26 October 2002 (the "Insolvency Law") which was significantly amended at the end of 2008 and in the middle of 2009. This briefing does not discuss the insolvency of banks and other credit institutions which are subject to a special regime.
