Sergey Bakeshin has provided his comments to DP on the simplified process for interim measures

Delovoy Peterburg, a business newspaper, has analysed the decision of the Russian Supreme Court, according to which in order for interim measures to be issued in insolvency matters, administrators must confirm a reasonable risk that assets may be concealed. At the same time, the judicial board on economic disputes ruled that the efficiency of resolving the issue of applying interim measures with a low standard of proof does not violate the rights of the subsidiary debtor.

According to the Head of the Dispute Resolution and Insolvency department at Maxima Legal, Sergey Bakeshin, the practice for insolvency cases is becoming more and more in favour of creditors.

“One of the effective legislative instruments on insolvency is the imposition of subsidiary liability on controlling persons/entities. Anticipating the possibility of this, many directors, shareholders and beneficiaries “get rid” of property. This, on the one hand, reduces the effectiveness of subsidiary liability, and on the other hand, causes a “chain reaction” of bankruptcies, when, after the bankruptcy of the debtor, the bankruptcy of the controlling person is initiated and then relatives of the latter, to whom assets were transferred”, explained Sergey.

As Sergey noted, companies can be controlled by entities and organisations but most commonly assets in companies are recovered from individuals. “If this practice expands and extends to legal entities, there will become greater scope for misuse of the measures. If, when filing an application for bringing subsidiary responsibility for an organisation that is somehow affiliated with the debtor, it is possible to seize or freeze their property, then this can paralyze the organisation and lead to the insolvency of a large number of companies”, suggested Sergey.

To read the article in full (in Russian), please see the Delovoy Peterburg website.