Russian Government considers amending bankruptcy law - report
MOSCOW, March 3 (RAPSI) – The Russian government is discussing the possibility of adding an analogue of Chapter 11 from the United States Code (bankruptcy) to the Russian Legislation, Vedomosti newspaper writes on Tuesday, citing Deputy Finance Minister Alexei Moiseev.
Moiseev said the ministries are waiting for government instructions to draft amendments to the law on bankruptcy and that the task would likely be given to the Economic Development Ministry.
The idea sprouted from the antirecession plan, which provides for creating a bad debt agency/bank that would buy NPLs from banks and save companies from going bankrupt.
There are two kinds of bankruptcy in the United States. The bankrupt’s property is sold piecemeal, with returns divided between creditors, or the bankrupt company receives a new owner.
Russian bankruptcy procedure is based on a selloff of the bankrupt party’s property. If the proposed bill is adopted, the procedure would include a court hearing that would decide if the company’s problems are temporary. If so, the company would be removed from shareholder ownership and placed under receivership management who, in turn, would reorganize the company and look for investors.
The former shareholders would receive nothing in this case, according to Moiseeev. This procedure is already applied to banks, and we should do the same with non-banking companies, the deputy finance minister said.
A bad debt agency/bank would act as the interim receiver. The agency/bank would search for investors and would also have the right to invest its own funds, Moiseev said.