Insolvency Law in Russia

Bankruptcy and insolvency in Russia fall under the same law, Federal Law No. 127 FZ. The law refers mainly to insolvency procedures and was last amended in 2015 when several provisions related to individuals living in Russia and being allowed to file for personal insolvency.

The Russian Insolvency Law covers aspects like the procedures related to filing petitions with the commercial courts and the most recent amendments to this law provide for more transparency. This was a requirement imposed by the Russian government following the economic crisis in 2008. Now, thanks to the new Insolvency Law, Russia manages to attract more foreign investments due to these transparency provisions. Our Russian attorneys can offer information on the amendments brought to the Law on Insolvency.

What does the Russian Insolvency Law provide for?

In 2011, Federal Law No. 127 on Insolvency suffered the first modification when the Unified Federal Register of Bankruptcy Information (UFRBI) was enabled. This is an electronic platform containing information on all the insolvent companies in Russia. This has led to Russia rising several positions in the OECD’s Report on Resolving Insolvency.

The Insolvency Law in Russia provides for:

• -          assessment of creditors’ claims;
• -          financial reorganization of companies;
• -          supervision of the corporate restructuring procedures;
• -          amicable arrangements between debtors and creditors;
• -          the stages of the insolvency proceedings;
• -          administration of restructuring procedures by a court appointed officer.

The new insolvency legislation also contains special provisions related to the insolvency of financial institutions in Russia.

What are the stages of insolvency procedures in Russia?

According to the Russian Insolvency Law, a company or its creditors must first file a petition with an arbitration court before starting the insolvency proceedings. Only after the court has approved the petition, bankruptcy can be declared and insolvency procedures may be set off. The Insolvency Law provides for the following stages:

• -          supervision of the process;
• -          company reorganization;
• -          outside administration;
• -          liquidation;
• -          amicable agreements.

For assistance in insolvency matters, please contact our law firm in Russia.