The Russian government has introduced a bankruptcy moratorium with effect from 1 April to 1 October 2022 in respect of all Russian legal entities and individuals (“Persons“) except for certain residential real estate developers.
The moratorium is intended to protect Russian debtors against creditors’ claims and provide support for players on the Russian market given the challenging environment they operate in.
The key consequences of the introduction of the moratorium regime are as follows:
1. Introduction
As in other jurisdictions, Russia’s insolvency legislation is based on the pari passu principle. However, this principle is subject to certain exceptions, specifically with respect to shareholders and other non-arm’s length creditors, such as the controlling persons of an insolvent company (“Affiliated Creditors”).
In practice, Affiliated Creditors use other instruments (e.g. loans, intergroup supplies etc.) to have their claims listed in the creditors’ register of an insolvent company.
Russia's Supreme Court guidelines reduce high net worth individuals' ("HNWIs") asset protection opportunities and potentially create risks of additional creditor claims against HNWIs after divorce and asset division between the HNWI and his/her spouse.1
In addition, these guidelines enable third parties, notably creditors of the ex-spouse, to get access to information regarding the HNWI's disputed assets. We summarize the most important points of these guidelines below.
Key developments
Beauty Brands, LLC, along with two subsidiaries and affiliates, has filed a petition for relief under chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 19-10031).
Angel Medical Systems, Inc., a developer of medical devices based in Eatontown, NJ, has filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Case No. 18-12903).
Alcor Energy, LLC filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Case No. 18-12839).
White Eagle Asset Portfolio, LP, has filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-12808).
Checkout Holding Corp. (dba Catalina Marketing), along with ten affiliates and subsidiaries, has filed a petition for relief under chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-12794).
interTouch Holdings LLC and its affiliate, interTouch TopCo LLC, have both filed petitions for relief under chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-12772).
Argos Therapeutics, Inc. (f/k/a Merix Bioscience, Inc.) has filed a petition for relief under chapter 11 in the Bankruptcy Court for the District of Delaware (Case No. 18-12714).