Review on the new version of the bankruptcy act draft
The ministry of economic development has prepared a draft of amendments to federal act No. 127-FZ of 26.10.2002 "On insolvency (bankruptcy)" (hereinafter referred to as the bankruptcy act), which is proposed to be renamed into federal act "On restructuring and bankruptcy".
The draft contains revised provisions of earlier draft laws and is another attempt to introduce large-scale innovations related to the bankruptcy of legal entities, which have been widely discussed by the legal community in the past few years, into the Russian legal system.
The reform is aimed primarily at expanding the practice of applying rehabilitation mechanisms to debtors-legal entities by introducing a new rehabilitation procedure called debt restructuring. In addition, a number of significant changes are envisaged in the regulation of the activities of arbitration managers in order to increase their independence and efficiency, as well as an updated system of bidding for the sale of property during bankruptcy proceedings.
The project is published on regulation.gov.ru under ID 02/04/03-20/00100272 and is currently under internal approval by the ministry of economic development. The official website of the Russian Government also contains information that the ministry of economic development has been instructed to speed up the approval and submission of the draft law to the Government: this gives us a reason to believe that the current amendments to the bankruptcy act have a higher chance of being adopted.
It is obvious that the unfavourable economic situation that has developed against the background of the COVID-19 pandemic has made it necessary to quickly introduce a functioning rehabilitation procedure in the law that will allow businesses affected by the crisis to be preserved in the long term, including the time after temporary state support measures (in particular, deferred payment of mandatory payments and a moratorium on bankruptcy) have ceased to operate.