Russia: introduction of a moratorium on bankruptcies with effect until October 1, 2022
The Russian government has introduced a moratorium on bankruptcies with effect from April 1 to October 1, 2022 for all Russian legal and natural persons (“People“) except for some residential real estate developers.
The moratorium aims to protect Russian debtors against claims by creditors and to support Russian market participants given the difficult environment in which they operate.
The main consequences of the introduction of the moratorium regime are as follows:
- Courts will not accept bankruptcy petitions filed by creditors. Voluntary bankruptcy will still be possible, but the obligation of the Person (its managers or shareholders) to file for bankruptcy in the event of the Person’s objective insolvency has been suspended.
- If the Person fails to fulfill his obligations arising before April 1, no penalty will be incurred and no other financial sanction will apply.
- Enforcement proceedings on the responsibilities of the Person born before April 1 have been suspended. In most cases, it is prohibited to set off claims against the Person and to seize the goods pledged by the Person.
- Any person who is a legal person cannot distribute profits (dividends) to shareholders, redeem their shares and pay the real value of the participation to their participants. The Person’s participants cannot demand that the Person pay the value of the participation interest.
Any person has the right to declare a waiver of their “bankruptcy immunity”, in which case all the advantages and restrictions described above cease to apply.
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