Sergei Bakeshin has explained to Kommersant whether the unpaid penalty could lead to the bankruptcy of the Chinese entrepreneur and the business he owned  

Russkiy Torgovo-Promishlenniy Bank (The Russian Trade and Industry Bank) has filed bankruptcy petitions with the Commercial Court of St Petersburg and  the Leningrad Region against the structures of Hua-Zhen Group, which is engaged in hotel, restaurant and development business in St Petersburg. The bank is also trying to declare insolvent Wang Linan, Chinese entrepreneur and the former president of Hua-Zhen Group.

Agentstvo po Strakhovaniu Vkladov (The Deposit Insurance Agency), which acts as the bankruptcy trustee of Russkiy Torgovo-Promishlenniy Bank, explained the application to the court by the RUB 73.5 m penalty in connection with the payment of the debt with a delay of almost a year. Hua-Zhen Group believes that the claimed amount does not comply with the principle of proportionality of the losses caused and plans to appeal against the actions of the credit institution.

The amount of a penalty is not taken into account when considering whether a bankruptcy petition is justified; therefore it is usually not given much importance in such cases, Sergei Bakeshin, Counsel, Head of Dispute Resolution & Insolvency practice at Maxima Legal explained to Kommersant newspaper. According to the expert, the chance of supervision procedure is very high if the creditor’s claims consist not only of forfeit and the debt is not repaid.

To read the full article (in Russian) please visit Kommersant website >>>