Sergei Bakeshin has told Kommersant about ways to restore a debtor’s solvency during external management

Billionaire Alexander Ebralidze’s bankrupt company STOD has been given an opportunity to restore its solvency. To this end, external management has been introduced at the timber company, whose claims exceed RUB 49 billion. A decision to this effect was taken by the Commercial Court of St Petersburg and the Leningrad Region in the middle of September at the request of the bankruptcy trustee supported by the debtor`s main creditors – VEB.RF, Bank Saint Petersburg and BBR Bank. However, according to the experts, the rehabilitation procedures will be problematic, as the prerequisites for the demand growth for STOD products are absent.

Sergei Bakeshin, Head of Dispute resolution & Insolvency practice at Maxima Legal, explained to Kommersant newspaper that the plan of external management may include different measures to restore the debtor’s solvency. They may include conversion or shutting down of unprofitable production units, sale of property, increase of the share capital, replacement of assets. The company’s obligations may also be fulfilled by the founders of the company or by a third party. According to the expert, external management is found in about 1.5% of bankruptcy cases and the transition from insolvency proceedings, as in the case of STOD, is even rarer.

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