30 Nov 2020 10:07

Participants in Fedresurs Bankruptcy 2020: At the Crossroads webinars see new challenges for sector

Participants in the Bankruptcy 2020: At the Crossroads fall series of webinars on bankruptcy organized by Fedresurs noted the new challenges that the sector has faced this year.

"The Covid-19 pandemic's impact on the economy forced the government to take emergency steps to save hit sectors and support individuals, and it also significantly complicated the work of courts, receivers, and practicing lawyers. This exacerbated both previously known shortcomings in legislation and established practices, and brought to light new challenges for the sector," the head of law firm Olevinsky, Buyukyan & Partners, Eduard Olevinsky said, commenting on the results of the Fedresurs webinars.

He said the "incomes of many individuals fell sharply amid the pandemic and this put on the agenda the issue of the need for 'cheap' bankruptcy proceedings to write-off small debts in conditions where an individual is not capable of paying for conducting a full-fledged bankruptcy proceeding."

"Now we have two proceedings - an essentially free one for debtors, but with potentially fairly high risks for creditors, and a fairly expensive one, but with real instruments of control and influence for creditors. A serious question arises about how to bring them closer together - expand the application of the free one or simplify and thus reduce the cost of the conventional procedure," Olevinsky said.

The director of the Russian Union of Self-regulating Organizations of Receivers, Kirill Nogotkov said "many important actions in bankruptcy proceedings can be carried out only with the personal participation of the receiver, the debtor, creditors, with their necessary presence at meetings, in courts."

"The pandemic essentially led to these proceedings being suspended. The regime of nonworking days and restrictions on the work of the courts due to the need to comply with health rules, on one hand, stimulated the development of electronic adjudication, and on the other posed difficult challenges for practitioners, such as for receivers in holding meetings of creditors," Nogotkov said.

"We already see this fairly clearly in statistics - the number of actions in certain periods decreases, timeframes increase," Nogotkov said.

The director of the Fedresurs project, Alexei Yukhnin said that, besides personal bankruptcies, participants in the Fedresurs webinars were most interested in subsidiary liability. However, the most heated debates were about the status, rights, and obligations of receivers.

Participants also discussed legislative initiatives that change bankruptcy regulations; searching for assets siphoned off and management incentive pay paid out prior to the start of bankruptcy proceedings and returning them to the bankruptcy estate; tactics for responding to complaints and attempts to collect losses from managers; and the current situation on the liability insurance market.

The webinars discussed in detail the subject of violations in the course of auctions and the tendency to subordinate the claims of affiliated creditors. Practical cases of disputed transactions, and problems of court and out-of-court personal bankruptcy proceedings were studied.

"We managed to put together a good agenda for the whole cycle of events with the participation of both academics and practitioners, as well as representatives of government agencies who directly shape government policy in this area, including the State Duma of Russia, the Economic Development Ministry, and the Federal Tax Service. And this is confirmed by the high statistics of online participation throughout the whole run of the webinars," Yukhnin said, remarking that more than 3,200 industry professionals, including receivers, government officials, lawyers, and experts, participated in the online Fedresurs webinars.

"We hope that next year the epidemiological situation will allow us to return to the traditional format of the in-person annual Fedresurs conference in Moscow," Yukhnin said.

"Fedresurs promptly responded to the situation on the market, proposing the most urgent bankruptcy issues for discussion in the webinars," Igor Vyshegorodtsev, a receiver and director of the Voronezh branch of the Avangard self-regulating organization, said.

"Along with the large amount of theory, quite a few examples from practice, including ones tried and tested by the speakers, were given in the Fedresurs webinars, which is why these events are particularly valuable," receiver Ivan Gusev said after the webinars.

The founder and member of the supervisory board of the Bankruptcy Club National Association Rustem Miftakhutdinov noted the skill of the Fedresurs webinar moderators and the relaxed atmosphere. "The leading speakers and burning issues made Fedresurs's multiday online discussions the main bankruptcy law event of the fall," he said.

The first Fedresurs annual conference was held in Moscow in the fall of 2019 with the goal of promoting an open dialog with practitioners and experts. The format of the second conference, scheduled for 2020, was changed to a cycle of webinars that were held from October 8 to November 19.

The partners in the business program of the webinars were the law firm Olevinsky, Buyukyan & Partners, SB Arbitr LLC, the Torgi Rossii portal and SRO Delo. The operator of Fedresurs is JSC Interfax.

Recordings of the Fedresurs Bankruptcy 2020: At the Crossroads webinars are available on the Interfax Group's YouTube channel.