Specially for Novy Prospect, Sergei Bakeshin analysed the possible bankruptcy of the Pella plant

According to the Unified Federal Register of Legal Entities, LLC Ferrumland intends to file for bankruptcy of OJSC Pella. The Arsenal engineering plant has also applied to the Arbitration Court twice before to declare Pella insolvent. It is noteworthy that possible bankruptcy of the company may complicate the sale of some of its assets to the Norebo holding, as well as negatively affect the announced plans of Pella’s reorganization.

Sergei Bakeshin, Head of Dispute Resolution and Insolvency practice at Maxima Legal reminded Novy Prospect that “now the bankruptcy case on Arsenal’s petition has been commenced; the hearing has been postponed to 13 January for amicable settlement of the dispute”.

According to the expert, Pella’s creditors can unite in claiming their funds from the debtor. “The Supreme Court has pointed out that if several bankruptcy petitions have been filed against one person, the court should not allow the debtor to discharge the creditor’s claims one by one, thereby giving an opportunity to abuse and delay repayment of other debts. Some bankruptcy cases drag on for years at the validity stage, while dozens of creditors wait for years for their turn to be heard,” Sergei explained.

“Instead, courts have been proposed to schedule court sessions for joint consideration of the claims of several claimants. But since the law does not provide a procedural form for such joint hearings, courts do not often follow this recommendation,” the expert pointed out. According to Sergei Bakeshin, creditors themselves can theoretically file a joint bankruptcy petition. In this case their claims would definitely be considered at the same time.

Analyzing the impact of possible bankruptcy on the plans of Pella and Norebo Holding, Sergei said that “the sale of a large asset on the eve of bankruptcy will certainly be contested. It is therefore risky for the buyer. At the same time, at an auction in bankruptcy proceedings, the asset can probably be bought at a substantial discount. Another question is what state the asset will be in by then. Besides, in case the bankruptcy proceedings are initiated the managing bodies of the debtor will not be able to make a decision on its reorganization. However, according to Sergei Bakeshin, there is no information in the Unified State Register of Legal Entities that Pella is in the process of reorganization, i.e. no decision to start it has been made yet.

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