We run the procedure in the client’s interests
We support personal and corporate bankruptcy, from filing the application to completion of the procedure. We act for both debtors and creditors, including challenging questionable pre-bankruptcy transactions and entering claims in the register of creditors’ claims.
A separate area is protecting managers and business owners from subsidiary liability for company debts, including in bankruptcy cases already under way.
The practice is overseen by a partner of the firm.
What the service includes:
From our practice
How we work
The strategy depends on which side you are on, the debtor’s or the creditor’s.
Assessing your situation
We establish who the client is in the case (debtor, creditor, or a manager facing subsidiary liability) and which strategy fits that role.
Choosing the procedure and strategy
For the debtor: restructuring or sale of assets with protection of the sole home. For the creditor: timely entry in the register of creditors’ claims.
Conduct of the procedure
We support the client at all creditors’ meetings and court hearings, and prepare and file all the necessary procedural documents.
Securing the result
We see the case through to the write-off of the debt, entry in the register or the dismissal of a subsidiary liability claim, depending on the client’s role in the case.
In numbers
The experience behind every recommendation.
Other practices
Who we help
Business owners. When a company is in crisis and personal guarantees, pledges and loans secured on personal property turn corporate debt into personal debt, it is important to understand in advance which personal assets are protected and which are not.
Top management. Directors, finance directors and board members who face subsidiary liability, often after a change of company owner or the arrival of a bankruptcy trustee, when the decisions were taken one or two years before the bankruptcy and require separate analysis.
Creditors. Companies and individuals owed money by a bankrupt counterparty, from timely entry in the register of creditors’ claims to tracing assets withdrawn before the bankruptcy application was filed.
Private clients with assets abroad. When a personal bankruptcy in Russia overlaps with accounts, property or a business in another jurisdiction, and the composition of the bankruptcy estate depends on it.
Preventing subsidiary liability
Subsidiary liability is easier to prevent than to contest in court: most claims rest on decisions and transactions taken one to three years before the bankruptcy, which looked routine when they were signed.
Timely filing of the application. The law requires the manager to apply to the court for the company’s bankruptcy within a month of learning of signs of insolvency. A delay is in itself an independent ground for subsidiary liability.
An audit of transactions over the last three years. Transactions with related parties, asset stripping at below-market prices, dividend payments when there are signs of insolvency: these are the operations most often challenged in bankruptcy cases.
Separating personal and corporate assets. Personal property registered to a director or owner but actually used by the company regularly becomes the subject of a separate dispute with the trustee.
Documenting management decisions. Minutes, rationales and opinions showing that a decision was a business one and not asset stripping are the main evidence in a subsidiary liability dispute, provided they are prepared in advance and not after the event.
Cross-border bankruptcy
A Russian bankruptcy procedure does not apply automatically abroad. If the debtor or creditor has assets, accounts or a business in another jurisdiction, recognition of the Russian decision there is a separate procedure, not a formality.
For creditors. Tracing and freezing a debtor’s foreign assets requires parallel proceedings in the country where the assets are located, and the rules on such recognition differ widely between common law and civil law countries.
For owners and top management. Exchange of tax information between countries and enquiries from foreign banks make simply hiding assets abroad pointless. A strategy that works rests on lawful protection of the ownership structure, not on concealment.
For private clients. Where there is tax residency or assets in several countries, it is important to know in advance which jurisdiction will recognise a Russian bankruptcy decision and which will require a separate, independent process.
Jurisdictions our bankruptcy cases most often involve:
Frequently asked questions
Will all debts be written off in personal bankruptcy?+
Not all of them: some obligations (for example, maintenance payments) are not written off. We analyse the exact makeup of the client’s debts before the application is filed.
Will my only home be taken in bankruptcy?+
As a general rule, the sole home is protected from recovery, except where it is mortgaged. The procedure must be conducted correctly so that this rule is observed in practice.
Can a director face subsidiary liability for the company’s debts?+
It can, if it is proved that the director’s actions led to the bankruptcy or caused loss to creditors. Defence against such claims is a separate area of our practice.
What should I do if a counterparty I owe money to has gone bankrupt?+
Your obligations to it pass to the bankruptcy trustee. It is important to check whether payments made in its favour before the bankruptcy are being challenged.
Can a company’s bankruptcy be stopped?+
In some cases yes, through debt restructuring or a settlement agreement with creditors. We assess this possibility at the outset, before moving on to sale of assets.