Russia wants to speed up the bankruptcy process of companies

In Russia, they plan to speed up the bankruptcy process for legal entities. They want to reduce the term of bankruptcy proceedings from 47 to 40 months, and the sale of assets from 520 to 300 days. Such data was provided to Izvestia by the press service of the Agency for Strategic Initiatives (ASI), emphasizing that such changes are expected to be introduced by 2030 as part of the National Model of Targeted Business Conditions.

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According to financial organizations, this status covers those who were not going to repay the loan, but what about those who really got into trouble?

As Vladimir Chernov, an analyst at Freedom Finance Global, noted, the bankruptcy mechanism itself primarily protects the interests of creditors, as well as the rights of debtors. Such a procedure is necessary when a company is unable to fulfill its financial obligations, such as paying salaries, severance payments, and repayment of loans.

However, reducing deadlines by itself does not guarantee efficiency, says Alexandra Begaeva, Managing Partner of the Begaeva and Partners Law Office. Among the main disadvantages of the mechanism are the lack of transparency in the valuation and sale of assets, conflicts of interest, and the weakness of the institution of financial recovery. According to the expert, special attention should be paid to this.

Despite the significant reduction in the stages of bankruptcy, the procedure will still remain lengthy compared to other states. For example, in America and Germany, it takes place in a year and a half. Thus, reducing the time does not solve any key problems of the mechanism, except for reducing the cost of bankruptcy of the debtor, said Evgeny Pantaziy, a member of the Russian Bar Association.

Read more in the exclusive Izvestia article:

Acceleration to 300: Russia wants to speed up the bankruptcy process of companies