Bankruptcy Proceedings

Russian bankruptcy is governed by the Federal Law on Insolvency (Bankruptcy) and heard by arbitrazh courts. For a creditor, it is a way to collect from a debtor who hides assets. For a debtor, it is a regulated process with serious consequences for owners and managers. Attorney Elena Petrova represents creditors, debtors and company controllers in Russian bankruptcy cases, including clients who live in California and follow the case remotely.

We start by looking at the case file on kad.arbitr.ru and the Unified Federal Register of Bankruptcy Information, then define the client's position: claim, defence or protection of assets.

Stages of a Russian Bankruptcy

A corporate case usually begins with supervision, when a temporary manager analyses the debtor and forms the register of claims. The court may then introduce financial rehabilitation or external management, but most cases go straight to liquidation proceedings, known as competitive proceedings. Individuals go through debt restructuring or sale of assets.

Protecting Creditors' Rights

A creditor who does not file a claim on time risks being paid last or not at all. After the procedure is announced, claims must be submitted within the period set by law, and every claim is checked by the court. Other creditors and the manager may object, especially to claims from affiliated companies.

We prepare the claim with full evidence, contest fictitious claims of friendly creditors and take part in creditors' meetings. Creditors can also press the manager to challenge suspicious deals.

Challenging Transactions

Deals made before bankruptcy can be set aside if they harmed creditors or preferred one of them. Typical targets are sales of property below market, transfers to relatives or affiliated firms and payments to a single creditor on the eve of insolvency. Look-back periods are counted from the date the court accepted the petition. Returned assets go into the estate and are distributed among all creditors.

Defending the Debtor

A company or individual facing bankruptcy needs a plan early. We review the debts, assess which transactions may be attacked and prepare explanations for the manager and the court. For individuals, the key question is release from debts at the end. Courts can refuse release where the debtor acted in bad faith, hid income or provided false information.

Subsidiary Liability of Controllers

Directors, owners and other controlling persons can be held personally liable for the company's debts. Grounds include failure to file for bankruptcy on time, actions that caused insolvency and missing or distorted accounting records. The law presumes fault in several situations, so the defence must show that decisions were reasonable and made in good faith. The liability usually covers the creditors' claims left unpaid after the estate is sold.

Timing and Practical Steps

A creditor should watch the register for announcements about the debtor. A director who sees clear signs of insolvency must weigh the duty to file a petition. Delay on either side weakens the position.

Working With the Attorney

Send the court case number or the debtor's details, the contracts and any payment records. You will receive an assessment of your position and next steps.

The main channel of communication with the attorney is email: attorneypetrova1@gmail.com.