International bankruptcy procedures

As international relations develop, business more often faces situations when insolvency procedure goes beyond the borders of one country. Bankruptcy can be considered international when there is at least one cross-border element (for example, location of the creditor or the debtor’s property in another country).

Signs of insolvency are often met by entire holding, whose members are located all around the world. At the same time, creditors of companies that are part of this holding have interests in several jurisdictions.

In Russia and in most countries of the world, the principle of equality of foreign and national creditors is fundamental. However, foreign creditors in Russia actually face a number of practical problems, such as informing about the procedure, proper legalization of documents, and others.

That is why foreign creditors often sell their claims to local firms at significant discount.

The situation is similar for Russian companies abroad: due to the need for exequatur, lack of knowledge about the ways of resolving dispute and collecting debts, many firms stop halfway and do not receive their rightful funds.