Deputies introduced draft amendments to the State Duma to speed up the bank bankruptcy procedure

Deputies have submitted to the State Duma draft amendments to legislation that would speed up the bankruptcy procedure of banks by selling their unsold property. Currently, not all lenders have this opportunity. The Central Bank and the Deposit Insurance Agency (DIA) support the bill, but lawyers see in it the risk of a conflict of interest: in case of bankruptcy of banks, the DIA is not only the largest first-priority creditor, but also the bankruptcy trustee.

A group of deputies led by the head of the State Duma Committee on Property, Land and Property Relations Sergei Gavrilov submitted to the lower house of parliament bill, aimed at accelerating the satisfaction of the claims of creditors of bankrupt banks by providing compensation. The document amends the laws “On Insolvency (Bankruptcy)” and “On Deposit Insurance”.

The draft proposes to expand the use of the mechanism for providing creditors with compensation to repay their claims. Property that is not sold during the auction can be transferred as compensation.

Now for banks this is possible only if there are no outstanding current payments, as well as requirements of the first and second stages. It is necessary to expand the circle of persons whose claims can be repaid with compensation, and to include in it the claims of first-priority creditors, the authors of the bill believe that 90% of the first-priority claims are DIA claims for paid insurance compensation.

The Bank of Russia is familiar with this bill and generally supports it, the Central Bank told Kommersant. “Satisfying the claims of creditors by providing compensation will improve the efficiency of liquidation procedures,” they pointed out there. “The legislatively enshrined opportunity for the bankruptcy trustee in bankruptcy cases of financial organizations to offer unsold property to creditors as compensation, even in the presence of outstanding claims of creditors of the first or second priority, will contribute to more full and prompt satisfaction of requirements and reduction of time frames for liquidation procedures.”

In addition, due to the innovation, the period of time that assets remain on the balance sheet of liquidated banks will decrease and, as a result, the costs of their maintenance, carried out from the bankruptcy estate of these banks, will decrease, Kommersant indicated in the DIA. The agency’s practice of transferring property to creditors of liquidated banks as compensation indicates the effectiveness of this instrument and the absence of risks of violating the rights of creditors when using it, they emphasized. According to the DIA, in the period from January 2021 to January 2024, measures to repay creditors’ claims using compensation were carried out in 106 liquidated credit institutions; property worth 166 billion rubles was transferred to creditors as compensation. In particular, in 46 banks the rights of claim against the persons who controlled them were transferred as compensation with a total value of 151 billion rubles.

Lawyer of AB NSP Jamilya Zuikova notes that often when selling property within the framework of bankruptcy, a buyer is not found. “If there are debts of the first and second priority, the debtor’s unrealized property is distributed among the owners or founders (participants) of the debtor or written off,” she explains. “Consequently, the debtor’s bankruptcy estate is not replenished, and the property essentially “burns out”.”

Orchards advisor Azat Akhmetov believes that the proposed mechanism can speed up bank bankruptcy procedures, since it eliminates the need to conclude direct agreements and lengthy attempts to sell the debtor’s property.

Ms. Zuikova generally supports the possibility of transferring property to DIA for compensation, but is afraid of possible abuses: “In order to receive property as compensation, for example, you can put the asset up for auction at an inflated price so that no one buys it.”

In addition, the amendments propose “to give the court the right, on the basis of the conclusion of the DIA, to approve the sale of the right of claim under a subsidiary, regardless of the opinion of the debtor’s bankruptcy creditors, which infringes on their interests,” notes Ms. Zuikova. “Changing the method of disposing of the right of claim contrary to the opinion of creditors, even based on a reasoned conclusion of the DIA, is unacceptable,” agrees Mr. Akhmetov.

Ksenia Dementieva, Anna Zanina