News
29.01.2015
January 29, 2015
On 22 December 2014 and on 29 December 2014 the President signed Federal Laws No. 432-FZ “On Amending Certain Legislative Acts of the Russian Federation.” and No. 482-FZ “On Amending the Federal Law On Insolvency (Bankruptcy) and Administrative Offences Code”,
The Laws seriously amend and improve the Federal Law “On Insolvency (Bankruptcy)” (the “Bankruptcy Law”), significantly change the rules OF conducting bankruptcy proceedings. To a greater extent these amendments aim at combating abusive practices and misbehavior of a debtor and by this means the Bankruptcy Law becomes more creditor-oriented.
1.The amendments increase the minimum amount of an outstanding debt for the purposes of the institution of the bankruptcy proceedings from 100 000 rubles to 300 000 rubles. For the purposes of the institution of the bankruptcy proceedings against strategic companies or subjects of natural monopolies the minimum amount starts from 1 million.
2.Insolvency proceedings can be commenced at the petition of a creditor having an arbitration decision only in case when a state arbitrazh court or a general jurisdiction court rendered a ruling on issuing a writ of execution for the enforcement of the arbitration award. This provision was introduced earlier in the Resolution adopted at the Plenary Session of the Supreme Commercial Court of the Russian Federation No. 60 dated 23 July 2009.
3.Lending organizations enjoy privileges when initiating the insolvency proceedings. They won’t have to confirm their monetary claim by a court decision. Now lending organizations may petition for the debtor's bankruptcy from the date when the debtor shows "signs of bankruptcy" not having a court decision to recover debt owed by the debtor. The creditor should publish a notification on his intention at the Unified Federal Register of Companies’ Information within 15 days prior to the commencement of the bankruptcy proceedings. It is notable that the initial idea to envisage such an order for any creditor was rejected.
Besides, the transfer OF funds made by the debtor under a credit agreement now cannot be considered as unfair preference transactions, if by the time of the payment the debtor didn`t have other matured monetary claims and the payment was made in the ordinary course of credit agreement.
4.The status of secured creditors was significantly improved. They get rights to vote for a bankruptcy manager or a self-regulatory organization (a “SRO”) from the members of which the bankruptcy manager should be approved, and to vote on issues as to an application to the court for the removal of the bankruptcy manager and transition to external administration. At present the secured creditors are fully unable to affect the conduction OF proceedings after supervision stage that hampers realization of rights and lawful interests within bankruptcy.
5.The procedure OF creditors' committee held by somebody else other than the bankruptcy manager was additionally regulated.
6.The rights OF the bankruptcy manager to request information classified as commercial, bank or official secrecy were specified. Ambiguity in this respect frequently resulted in a refusal to provide confidential documents for the bankruptcy manager. The most important amendment is the one that allows the bankruptcy manager to request confidential information in respect of the management bodies of the debtor and its controlling persons and about property (and property rights) belonging to them, as well as to the contracting parties OF the debtor. Thus, the bankruptcy manager has received powers making him even a mightier person in the bankruptcy proceedings. It is remarkable that after the expansion OF manager’s powers administrative liability for a failure to perform his managerial obligations was increased.
7.CEO’s duty to notify a shareholder or owners of the property of the unitary enterprise about the signs OF bankruptcy should be performed within 10 days after he learnt (or should have learnt) about it. A failure to perform is now subject to an administrative prosecution: fine from 25 000 to 50 000 rubles or disqualification of the director.
8.Significant amendments were made in respect of the rules related to the company’s petition for self-bankruptcy. The debtor should publish a notification on his intention in the Unified Federal Register of Companies’ Information. The debtor having petitioned himself bankrupt loses the right to choose an interim administrator. Only the SRO from the members of which the bankruptcy manager should be appointed shall be indicated. But this is also done without the choice of the debtor by random selection when publishing his intention The order of selection is to be approved by the authorized governmental body. Thereby the lawmaker prevents unfair debtors from selecting a loyal bankruptcy manager for the purpose of retaining control over the company.
9.Upon commencement of the supervision stage penalties, fines and other financial sanctions for breach or improper performance of monetary obligations or mandatory payments save for current payments stop being accrued. Such consequences were applied earlier only in financial rehabilitation, external administration and liquidation stages.
10.The Bankruptcy Law includes new provisions on moratorium interest which were applied earlier according to the Resolution adopted at the Plenary Session of the Supreme Commercial Court of the Russian Federation No. 88 dated 06 December 2013.
11.An interim manager and other persons participating in the case are now entitled to plead that the limitation period has been missed as a defence against a creditor’s claim that has been brought in supervision, external administration and liquidation stages.
12.A registered creditor or a government agency whose claims constitute more than 10% of the overall registered amount of creditors’ claims, gain right to challenge debtor’s transactions. The claims of the creditor and his affiliates (a transaction with whom is being challenged) should not be taken into account when calculating an overall amount of indebtedness.
13.Following the results of the supervision in addition to the report and opinion on the financial status of the debtor, the bankruptcy manager will be obliged to prepare the opinion on the existence or absence of grounds for challenging the debtor's transactions. Unfortunately, the law does not contain requirements for the content of such an opinion.
14.The duty of the bankruptcy manager to notify creditors in written form about submission of other creditors' claims has been terminated. Therefore, the consequential obligation of the creditor to reimburse the manager’s costs for notification of other creditors about the submitted claim has also been canceled. Instead, the manager must publish information about the incoming claims in the Federal Register of the information about the bankruptcy.
15.Auctions in an electronic form have to be carried out only on the electronic platform, whose operators are members of the SRO of operators of the electronic platforms. The status and functions of the SRO of operators of the electronic platforms that are designed to monitor compliance with the conditions of membership operators (standards) are regulated in details.
16.The rules aimed at preventing abuse during the substitution of assets in external management and liquidation stage have been modified:
• collateral is replaced by the shares of newly registered joint stock company in proportion to the value of the pledged assets.
• the sole executive body of a newly established company is a bankruptcy manager or a person appointed by him on the basis of the decision of the creditors’ meeting;
• The creditors’ meeting approves the charter of the joint stock company;
• The joint stock company cannot dispose of its property in share capital until the sale OF all its shares during the bankruptcy.
17.The salary of any debtor’s employees may be reduced by the court. Previous version of the law allowed such reduction only in respect of employees of the management level. A bankruptcy manager or creditors may challenge within the bankruptcy any agreements and orders on increase in wages, the payment of bonuses or the implementation of other payments in accordance with the labor legislation of the Russian Federation.
18.The secured creditors have been authorized to determine not only the procedure and the conditions of the sale of the collateral, but also to determine the initial selling price of the collateral, terms and conditions to ensure the preservation of the collateral. These data have to be published by a bankruptcy manager in the Federal Register of information about the bankruptcy. In addition, the amended law allows the resolution of disagreements about the initial price, terms and conditions, not only between the manager and the secured creditor, but also between other parties to the bankruptcy proceedings. The procedure of establishment of the secured creditor ownership over the collateral in case of the absence of bids during the auction for the sale of property by public offer has been clarified.
19.In addition, the Administrative Offences Code has been amended by greatly increasing the penalties for misconduct during the bankruptcy. For some corpus delicti fines have been increased up to 10 times and amounts from 50 000 to 100 000 rubles. The list of subjects of administrative liability for the failure to perform duties prescribed by the legislation on bankruptcy has been expanded. The list includes inter alia the registrar, the auction organizer and operator of an electronic platform.
20.All the provisions of the Federal Law of 25.02.1999 №40-FZ "On Insolvency (Bankruptcy) of lending agencies" were transferred to §4.1 of the Chapter IX of the Law on Insolvency (Bankruptcy). The Federal Law №40-FZ has been repealed.
ИСТОЧНИК: http://www.lidings.com/eng/legalupdates2?id=161
Amendments to the Russian Federal Law On Bankruptcy
Amendments to the Federal Law On BankruptcyJanuary 29, 2015
On 22 December 2014 and on 29 December 2014 the President signed Federal Laws No. 432-FZ “On Amending Certain Legislative Acts of the Russian Federation.” and No. 482-FZ “On Amending the Federal Law On Insolvency (Bankruptcy) and Administrative Offences Code”,
The Laws seriously amend and improve the Federal Law “On Insolvency (Bankruptcy)” (the “Bankruptcy Law”), significantly change the rules OF conducting bankruptcy proceedings. To a greater extent these amendments aim at combating abusive practices and misbehavior of a debtor and by this means the Bankruptcy Law becomes more creditor-oriented.
1.The amendments increase the minimum amount of an outstanding debt for the purposes of the institution of the bankruptcy proceedings from 100 000 rubles to 300 000 rubles. For the purposes of the institution of the bankruptcy proceedings against strategic companies or subjects of natural monopolies the minimum amount starts from 1 million.
2.Insolvency proceedings can be commenced at the petition of a creditor having an arbitration decision only in case when a state arbitrazh court or a general jurisdiction court rendered a ruling on issuing a writ of execution for the enforcement of the arbitration award. This provision was introduced earlier in the Resolution adopted at the Plenary Session of the Supreme Commercial Court of the Russian Federation No. 60 dated 23 July 2009.
3.Lending organizations enjoy privileges when initiating the insolvency proceedings. They won’t have to confirm their monetary claim by a court decision. Now lending organizations may petition for the debtor's bankruptcy from the date when the debtor shows "signs of bankruptcy" not having a court decision to recover debt owed by the debtor. The creditor should publish a notification on his intention at the Unified Federal Register of Companies’ Information within 15 days prior to the commencement of the bankruptcy proceedings. It is notable that the initial idea to envisage such an order for any creditor was rejected.
Besides, the transfer OF funds made by the debtor under a credit agreement now cannot be considered as unfair preference transactions, if by the time of the payment the debtor didn`t have other matured monetary claims and the payment was made in the ordinary course of credit agreement.
4.The status of secured creditors was significantly improved. They get rights to vote for a bankruptcy manager or a self-regulatory organization (a “SRO”) from the members of which the bankruptcy manager should be approved, and to vote on issues as to an application to the court for the removal of the bankruptcy manager and transition to external administration. At present the secured creditors are fully unable to affect the conduction OF proceedings after supervision stage that hampers realization of rights and lawful interests within bankruptcy.
5.The procedure OF creditors' committee held by somebody else other than the bankruptcy manager was additionally regulated.
6.The rights OF the bankruptcy manager to request information classified as commercial, bank or official secrecy were specified. Ambiguity in this respect frequently resulted in a refusal to provide confidential documents for the bankruptcy manager. The most important amendment is the one that allows the bankruptcy manager to request confidential information in respect of the management bodies of the debtor and its controlling persons and about property (and property rights) belonging to them, as well as to the contracting parties OF the debtor. Thus, the bankruptcy manager has received powers making him even a mightier person in the bankruptcy proceedings. It is remarkable that after the expansion OF manager’s powers administrative liability for a failure to perform his managerial obligations was increased.
7.CEO’s duty to notify a shareholder or owners of the property of the unitary enterprise about the signs OF bankruptcy should be performed within 10 days after he learnt (or should have learnt) about it. A failure to perform is now subject to an administrative prosecution: fine from 25 000 to 50 000 rubles or disqualification of the director.
8.Significant amendments were made in respect of the rules related to the company’s petition for self-bankruptcy. The debtor should publish a notification on his intention in the Unified Federal Register of Companies’ Information. The debtor having petitioned himself bankrupt loses the right to choose an interim administrator. Only the SRO from the members of which the bankruptcy manager should be appointed shall be indicated. But this is also done without the choice of the debtor by random selection when publishing his intention The order of selection is to be approved by the authorized governmental body. Thereby the lawmaker prevents unfair debtors from selecting a loyal bankruptcy manager for the purpose of retaining control over the company.
9.Upon commencement of the supervision stage penalties, fines and other financial sanctions for breach or improper performance of monetary obligations or mandatory payments save for current payments stop being accrued. Such consequences were applied earlier only in financial rehabilitation, external administration and liquidation stages.
10.The Bankruptcy Law includes new provisions on moratorium interest which were applied earlier according to the Resolution adopted at the Plenary Session of the Supreme Commercial Court of the Russian Federation No. 88 dated 06 December 2013.
11.An interim manager and other persons participating in the case are now entitled to plead that the limitation period has been missed as a defence against a creditor’s claim that has been brought in supervision, external administration and liquidation stages.
12.A registered creditor or a government agency whose claims constitute more than 10% of the overall registered amount of creditors’ claims, gain right to challenge debtor’s transactions. The claims of the creditor and his affiliates (a transaction with whom is being challenged) should not be taken into account when calculating an overall amount of indebtedness.
13.Following the results of the supervision in addition to the report and opinion on the financial status of the debtor, the bankruptcy manager will be obliged to prepare the opinion on the existence or absence of grounds for challenging the debtor's transactions. Unfortunately, the law does not contain requirements for the content of such an opinion.
14.The duty of the bankruptcy manager to notify creditors in written form about submission of other creditors' claims has been terminated. Therefore, the consequential obligation of the creditor to reimburse the manager’s costs for notification of other creditors about the submitted claim has also been canceled. Instead, the manager must publish information about the incoming claims in the Federal Register of the information about the bankruptcy.
15.Auctions in an electronic form have to be carried out only on the electronic platform, whose operators are members of the SRO of operators of the electronic platforms. The status and functions of the SRO of operators of the electronic platforms that are designed to monitor compliance with the conditions of membership operators (standards) are regulated in details.
16.The rules aimed at preventing abuse during the substitution of assets in external management and liquidation stage have been modified:
• collateral is replaced by the shares of newly registered joint stock company in proportion to the value of the pledged assets.
• the sole executive body of a newly established company is a bankruptcy manager or a person appointed by him on the basis of the decision of the creditors’ meeting;
• The creditors’ meeting approves the charter of the joint stock company;
• The joint stock company cannot dispose of its property in share capital until the sale OF all its shares during the bankruptcy.
17.The salary of any debtor’s employees may be reduced by the court. Previous version of the law allowed such reduction only in respect of employees of the management level. A bankruptcy manager or creditors may challenge within the bankruptcy any agreements and orders on increase in wages, the payment of bonuses or the implementation of other payments in accordance with the labor legislation of the Russian Federation.
18.The secured creditors have been authorized to determine not only the procedure and the conditions of the sale of the collateral, but also to determine the initial selling price of the collateral, terms and conditions to ensure the preservation of the collateral. These data have to be published by a bankruptcy manager in the Federal Register of information about the bankruptcy. In addition, the amended law allows the resolution of disagreements about the initial price, terms and conditions, not only between the manager and the secured creditor, but also between other parties to the bankruptcy proceedings. The procedure of establishment of the secured creditor ownership over the collateral in case of the absence of bids during the auction for the sale of property by public offer has been clarified.
19.In addition, the Administrative Offences Code has been amended by greatly increasing the penalties for misconduct during the bankruptcy. For some corpus delicti fines have been increased up to 10 times and amounts from 50 000 to 100 000 rubles. The list of subjects of administrative liability for the failure to perform duties prescribed by the legislation on bankruptcy has been expanded. The list includes inter alia the registrar, the auction organizer and operator of an electronic platform.
20.All the provisions of the Federal Law of 25.02.1999 №40-FZ "On Insolvency (Bankruptcy) of lending agencies" were transferred to §4.1 of the Chapter IX of the Law on Insolvency (Bankruptcy). The Federal Law №40-FZ has been repealed.
ИСТОЧНИК: http://www.lidings.com/eng/legalupdates2?id=161
About
Consul & Rubicon, Law firm LLC was founded by the attorneys at law & consultants & trustees in bankruptcy practicing in the field of insolvency & restructuring and liquidation of enterprises in 30 May, 2006 (the main state registration number 1063435051107, taxpayer identification number 3435078350, code of tax registration's reason 343501001, location is Russian Federation, Volgograd oblast (former name Stalingrad), city Volzhsky, Lenin prospectus, Building 20, office 11 (Office Center "Staraya Ploshchad"), 404130). During 13 years the companie's specialization is liquidation and bankruptcy of enterprises. The contact person is Dmitry Zipunnikov, attorney at law since 2008 & trustee in bankruptcy since 2011. Please, feel free to phone +79023627056 or send e-mail konrub@bk.ru or WhatsApp calling +7-902-362-70-56. Time zone of our location is Volgograd time (UTC+4).