Arbitral awards are often used to obtain an undue control in bankruptcy cases. In simple terms, affiliated companies use the mechanism described below to enable a creditor to unlawfully gain the status of a first applicant in subsequent bankruptcy proceedings, and thus, control the proceedings:

– A dubious obligation to pay a large amount (e.g. for delivery of goods, provision of services or a loan, etc.) is created between Company A, which is being prepared for bankruptcy, and its affiliated Company B.

The Plenum of the Supreme Court of the Russian Federation adopted Resolution No. 54 “On Certain Issues of Applying the General Provisions of the Russian Civil Code on Obligations and Their Performance”* on 22 November 2016.

The Resolution contains 59 paragraphs that clarify various provisions of the Russian Civil Code.

Among other things, the clarifications on the following issues are of interest to businesses from a practical perspective:

New grounds and conditions have been introduced to allow creditors to bring the executives and/or members of the management bodies of bankrupt Russian companies to subsidiary liability. This is expected to increase debtors’ assets that can be used to satisfy creditors’ claims as fully as possible. Also, any person will be able to find out whether bankruptcy procedures have been initiated against a legal entity by searching the * (the “Company Register”).

В июне 2017 г. вступят в силу поправки в законодательство, направленные на улучшение защиты прав кредиторов, что усилит борьбу со злоупотреблениями при банкротстве и ликвидации юридических лиц

DBI 2017 - A5 With Bleed.indd 3 20.02.2017 8:22:56 Doing Business in Russia 2017 Baker & McKenzie - CIS, Limited Moscow Office White Gardens, 10th Floor 9 Lesnaya Street Moscow 125047, Russia Telephone: +7 495 787 27 00 Fax: +7 495 787 27 01 [email protected] St. Petersburg Office BolloevCenter, 2nd Floor 4A Grivtsova Lane St.

In early 2015, credit institutions gained the right to initiate the bankruptcy of their debtors according to a simplified procedure – i.e., without a court decision ordering the recovery of debt.

The role of a bondholders’ representative (BR) improves the protection of bondholders’ rights and provides additional oversight of the execution of the issuer’s bond obligations. Let’s look at some of the practical aspects of BR activities.

Non-default period of a deal

The main BR responsibility during a regular deal period (when there is no default or signs of it) is to oversee the issuer’s activities and inform third parties. The law offers no list of events that a BR should control.

In October 2016, the Chamber for Commercial Disputes at the Supreme Court of the Russian Federation considered the cassation appeal of Eurasian Trading Company LLC (hereinafter – the Trading Company) in Case № А57-16992/2015 against the court’s refusal to introduce monitoring procedures with respect to RBP JSC (hereinafter – the Debtor) and decision to dismiss the application by the Trading Company without consideration.

22 ноября 2016 года Пленум Верховного Суда Российской Федерации издал Постановление № 54 «О некоторых вопросах применения общих положений Гражданского кодекса Российской Федерации об обязательствах и их исполнении».

Постановление содержит 59 пунктов, содержащих разъяснения различных положений Гражданского кодекса РФ. 

Практический интерес для бизнеса, помимо прочего, представляют разъяснения по следующим вопросам:

Doing Business in Russia 2015 Doing Business in Russia 2015 Baker & McKenzie - CIS, Limited Moscow Office White Gardens, 10th Floor 9 Lesnaya Street Moscow 125047, Russia Telephone: +7 495 787 27 00 Fax: +7 495 787 27 01 [email protected] St. Petersburg Office BolloevCenter, 2nd Floor 4A Grivtsova Lane St.