Debtors and creditors can use several options under the Insolvency Law in Saudi Arabia to address COVID-19-related difficultie
Intoduction
With the credit crunch impacting the Russian banking sector and Russian banks facing their gravest crisis since 1998 (as evidenced by Bank Globex freezing deposits), it is in our view timely to revisit the regulations affecting the insolvency of Russian credit organisations.
The business community is going to see an increase in default claims due to the mounting credit crisis. Many companies will not survive in such an environment and a wave of insolvencies is likely to ensue. The prospect of this has forced the State Duma to focus on developing a robust response. New bills, which would transform the Russian insolvency landscape, are currently under consideration.
The business community in Russia is going to see an increase in default claims due to the mounting credit crisis. Many companies will not survive in such an environment and a wave of insolvencies is likely to ensue. The prospect of this has forced the State Duma to focus on developing a robust response. New bills, which would transform the Russian insolvency landscape, are currently under consideration.
This legal update gives an overview of the key amendments to Federal Law No 127 - FZ "On insolvency (bankruptcy)" dated 26 October 2002 (the Insolvency Law) and Federal Law No 40 - FZ "On insolvency (bankruptcy) of credit organisations" dated 25 February 1999 (the Insolvency Law of Credit Organisations).
On 17 April 2009 the Russian State Duma adopted Federal Law No 73 - FZ - "On amendments to certain legislative acts of the Russian Federation" (the 73-FZ Law).
The Russian insolvency legislation mainly consists of the Civil Code of the Russian Federation (the Civil Code) and the Federal Law No. 127-FZ on insolvency (bankruptcy) dated 26 October 2002 (the Insolvency Law), the principal legislation on insolvency in the Russian Federation.
Summary
A new set of uniform rules for challenging transactions in insolvency and clarifying the circumstances in which debtors must file for insolvency has been introduced in Russia.
Background
Clearing and Netting Legislation
Background
Until recently Russian legislation was not familiar with the concept of close-out netting. Although there was no prohibition for market participants to enter into netting agreements, Russian courts would not enforce such agreements in case of bankruptcy. This led to the use of complex structures to avoid the negative consequences of the application of Russian law and was a strong argument in favor of using foreign entities and application of foreign law to derivative transactions.
On 9 August 2011, the Ministry of Economic Development and Trade of the Russian Federation published a draft law aimed at increasing the effectiveness of protecting first and second priority creditor rights (the "Draft Law").
Specifically, the Draft Law: