Granting the right to cancel moratorium on bankruptcy cases
Recently, amendments were made to the Federal Law dd 26.10.2002 N 127-ФЗ “On insolvency (bankruptcy)” – a legal act regulating bankruptcy process in Russia. One of the changes was an introduction of a new article governing a moratorium on bankruptcy proceedings. Also, legislator established the right of Russian government to bring it into force.
According to the change, for the duration of the moratorium:
• the obligation of the debtor to file an application with the commercial court for declaring bankrupt is suspended;
• foreclosure on pledged property is not allowed;
• enforcement proceedings for property claims under claims arising prior to the introduction of a moratorium are suspended (at the same time, arrests on the debtor’s property and other restrictions regarding the disposal of such property imposed during enforcement proceedings are not removed).
Оn April 3, 2020, the Russian government established a moratorium on initiating bankruptcy proceedings against the industries most affected by the dissemination of coronavirus infection, as well as systematically important organizations, strategic enterprises and strategic joint-stock companies.
According to the decree, statements of creditors declaring debtor bankrupt submitted to the commercial court during moratorium will be returned by the court. The same is established with respect to applications submitted before the moratorium but at the time of its introduction, decisions on which were not delivered by court.
Also, on April 17, 2020 the Parliament has adopted in the third reading a draft law amending the Federal Law “On Insolvency (Bankruptcy)” and allows person covered by the moratorium to refuse of its implication by entering information about it in the Unified Federal Register of Bankruptcy Information.
However, if the Government extends moratorium, the person’s earlier statement of refusal will lose force. In this case, it will be necessary to apply for refusal of moratorium implication one more time. This will help those who wish to carry out bankruptcy proceedings to avoid moratorium.
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