Bankruptcies are planning development – Newspaper Kommersant No. 4 (7449) of 01/12/2023

Another moratorium on bankruptcy, introduced in 2022 against the backdrop of hostilities in Ukraine, supported the trend observed since 2019 of a decrease in their number in the corporate sector – this time by 12%. Meanwhile, the tax authorities are increasingly initiating the procedure, which, according to experts, may indicate the aggravation of the financial problems of the business. Against the backdrop of an increase in the number of creditors’ intentions to start bankruptcy in October-December, experts admit a reversal of the trend towards growth. Bankruptcy continues to expand, slowly but steadily.

Difficult times ahead

The Federal Resource published data on insolvency procedures in the Russian Federation at the end of 2022.

Despite the serious economic crisis, 12.2% fewer legal entities were declared bankrupt year-on-year – 9 thousand people.

The key reason for the dynamics was the moratorium in force from April 1 to October 1, 2022, which did not allow creditors to bankrupt debtors, unless they refuse to apply this protective measure.

For the first time, the moratorium on bankruptcy was applied at the beginning of the pandemic in 2020, and then it had a stronger effect – the number of procedures fell immediately by 19.9%, to 9.9 thousand legal entities. However, to a certain extent, the trend manifested itself in 2019, when the number of bankruptcies decreased by 6%, to 12.4 thousand.

First Deputy Minister of Economy Ilya Torosov is sure that “the moratorium played its role and protected businesses and citizens in the conditions of turbulence in the economy.” Sberbank also considers the moratorium “a key factor influencing the dynamics of business bankruptcies.”

“If we take into account the six-month period of the moratorium, taking into account pent-up demand, we can assume that in the absence of this measure, the indicators for 2021 would most likely be exceeded,” agrees Vladimir Klimenko, senior lawyer at BGP Litigation. This assessment is confirmed by the fourth quarter of 2022: at the end of the moratorium, the number of publications about the intentions of creditors to bankrupt debtors increased by 1.6 times, to 12.26 thousand against 7.4 thousand in October-December 2021.

At the same time, the head of the Federal Resource Alexey Yukhnin believes that the increase in the number of intentions of creditors after the end of the moratorium (during its validity it was impossible to publish intentions) “quickly exhausted itself” and a serious increase in the number of bankruptcies should not be expected.

Sberbank also “does not expect an increase in corporate bankruptcies in 2023.” They noted that in the fourth quarter of 2022, the bank published about 300 notices of intent, most of which accumulated during the moratorium, but the problems of most debtors “arose long before that.”

Orchards adviser Azat Akhmetov clarifies that from the moment the intention is published, the creditor needs to wait 15 days before filing a bankruptcy petition with the debtor. Another two or three months pass before the introduction of the first procedure (observation) by the court, specifies Vladimir Klimenko. Supervision according to the law takes five months (but can be extended), after which the company can be declared bankrupt and bankruptcy proceedings can be opened. Thus, in the statistics, these legal entities-debtors will not appear until spring-summer – during this period, according to the expectations of the lawyers interviewed by Kommersant, an increase in the number of bankruptcies will begin.

Experts believe that one of the indirect evidence of the general deterioration in the financial condition of the business is the change in the composition of the initiators of bankruptcies – “ordinary creditors” resort to this less and less often: in 2022, they accounted for 66.4% of cases, while in 2021 – 72.4%, and in 2020 – 77.1%.

But the role of tax authorities is growing rapidly: in 2022, the structures of the Federal Tax Service initiated the bankruptcy of companies in almost a quarter of cases (23.1% of cases), while in 2020 it was only about 13%.

The debtors themselves often resort to bankruptcy, in 2022 such cases accounted for 10.1%, a year earlier – 8.2%. But employees are less likely to bankrupt employers (0.4% of cases in 2022 and 0.6% in 2021).

In Sberbank, the increase in the number of self-bankruptcies of legal entities is explained by a decrease in the activity of creditors due to the moratorium. Azat Akhmetov adds that more and more organizations “are aware of the normality of the bankruptcy procedure as such,” there is also “the fear of persons controlling the debtor of the inevitability of subsidiary liability for failure to file an application.”

The increase in the role of the Federal Tax Service, according to the lawyer, looks like “a signal of an intensifying crisis in the economy”: “As a rule, entrepreneurs try to pay off tax debts primarily under pain of criminal liability. If they are now unable to pay even their tax debts, then ordinary commercial creditors are in for a tough time.”

Financial problems remain the same

Bankruptcy of citizens, meanwhile, maintains a fairly rapid increase, although it is slowing down.

In total, 278.14 thousand people were declared bankrupt in 2022, which is 44.2% more year-on-year.

In 2021, the growth was 62%, in 2020 – 72.6%. In total, since the introduction of the procedure in October 2015, 753.3 thousand Russians have gone bankrupt through the courts. As before, in 2022, citizens most often went bankrupt themselves (96.7% of cases), 2.2% of procedures were initiated by creditors, 1% by tax authorities.

Given the low base, such a rapid growth in the number of bankruptcies of citizens cannot last forever, explains Anna Larina, Executive Director of Management Company Pomoshch LLC. Valeria Gerasimenko, General Director of the Union of Arbitration Managers SRO Northern Capital, Valeria Gerasimenko, adds that the slowdown in growth may be due to a slowdown in the economy as a whole starting from the spring of 2022 and a decrease in the number of consumer loans issued in 2020-2021. Sberbank believes that the rate of judicial bankruptcy of citizens will continue to decline, while “the causes of financial problems will remain the same: loss of income, irrational budget management, family divorces.”

Against this background, the demand for out-of-court bankruptcy procedures is growing.

Thus, in 2022, the MFC published 7.2 thousand messages on the initiation of the procedure, which is 52.6% more year-on-year. There are fewer errors in collecting documents – in 61.8% of cases, debtors manage to start the procedure, while in 2021 only half of the applicants succeeded.

Judicial and out-of-court procedures for bankruptcy of citizens are not interchangeable, Anna Larina clarifies: and the complete absence of the debtor’s property, which can be foreclosed, otherwise out-of-court bankruptcy is simply impossible. The significant increase in out-of-court procedures, according to Ms. Gerasimenko, can be explained by the fact that the mechanism appeared relatively recently (in September 2020).

In connection with recent government proposals to increase the debt threshold to 1 million rubles. and simplify access to the procedure for the most vulnerable categories of citizens (see “Kommersant” of November 17) bankers and lawyers expect a further increase in out-of-court bankruptcy this year.

Anna Zanina, Ekaterina Volkova