Mishustin extended the moratorium on initiating bankruptcy cases

Mishustin extended the moratorium on initiating bankruptcy cases

Mishustin extended the moratorium on initiating bankruptcy cases

The Russian government extended for 3 months – until January 7, 2021 – the moratorium on external bankruptcy for companies and individual entrepreneurs from the industries most affected by the pandemic. The decree was signed by Russian Prime Minister Mikhail Mishustin, the press service of the government said.

The moratorium as an anti-crisis measure does not allow the introduction of bankruptcy procedures at the initiative of external creditors, the foreclosure of the pledged property, and also suspends enforcement proceedings for penalties that arose before the moratorium was introduced.

The moratorium on the initiation of bankruptcy cases at the request of creditors will apply only to organizations and individual entrepreneurs included in the list of the most affected industries. This list previously included, in particular, air and road transport, fitness and health activities and sports, hotel business, public catering, activities for the provision of household services to the population (repair, laundry, dry cleaning, hairdressing and beauty salons) and a number of other industries …

The government imposed a moratorium on external bankruptcy until October 6, 2020 in April 2020. It also applies to strategic and strategic enterprises. However, most of the publicly traded companies subject to the moratorium have abandoned it to avoid the associated restrictions. Refusal from it retained them the right to pay dividends and conduct buybacks.

In mid-September, 517 thousand legal entities and 1.61 million individual entrepreneurs fell under the moratorium. This is about one seventh of companies registered in the Russian Federation and about 40% of individual entrepreneurs.

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