Sergei Bakeshin told the Novy Prospect about the practice of amicable settlements in bankruptcy cases

Commercial court of St Petersburg and Leningrad region approved amicable settlement between creditors of Saint Petersburg Pharmaceutical Factory JSC and the factory itself thus terminating the bankruptcy case. The document was concluded “with a view to restore the debtor’s solvency” which has got a chance to recover and will have to pay about 195 million rubles to the creditors within 3 years.

“Conclusion of an amicable agreement makes sense if the debtor has fixed assets, with the use of which the company can continue working and generate income, at the expense of which creditors’ claims will be settled,” Sergei Bakeshin, head of dispute resolution and insolvency practice at Maxima Legal, explained to the Novy Prospect online edition.

According to the expert, manufacturing companies most often meet such criteria and in other cases either there is no property worth preserving or the property is more profitable to sell at auction. “And bankruptcy is a liquidation procedure, not a rehabilitation one. Therefore, it usually ends with the sale of property and the liquidation of the bankrupt company. Statistically, not more than 5% of bankrupts avoid such a fate, and there are even fewer cases of voluntary settlement – about 2.2 percent”, stressed Sergei.

You can read the material on the on the Noviy Prospect website >>>