The Supreme Court has proposed changing some bankruptcy rules, which are designed to reduce the burden on judges

The Supreme Court of the Russian Federation (SC) proposed changing some bankruptcy rules, which are designed to reduce the burden on judges. The amendments developed by the Supreme Court complicate the possibility of bankruptcy of legal entities for their creditors, increasing the minimum amount of debt for this from 300 thousand to 2 million rubles, which should reduce the number of such cases in general. At the same time, it is being simplified for judges to consider a number of internal bankruptcy disputes – they do not need to write reasoned decisions and not hold hearings. In addition, arbitration managers (AMs) will be able to pay themselves small (up to 100 thousand rubles) interest for repaying the bankrupt’s debts. Larger amounts will be approved by the court, which has the right to reduce the remuneration if it is disproportionate. Lawyers and management authorities generally perceive the amendments positively, but the sharp increase in the amount of debt for bankruptcy of organizations and the new rules for regulating the payment of interest leave questions.

The Plenum of the Supreme Court on December 19 voted to submit to the State Duma a bill amending bankruptcy rules, the press service of the court told Kommersant. At the same time, the previous Supreme Court bill of 2018, which had stalled after the second reading, was withdrawn. The old draft proposed reducing the burden on bankruptcy judges by transferring to the AC the verification of the validity of creditors’ claims and their inclusion in the register. Now they decided to abandon this idea, but the task of reducing the workload of judges remained.

The reason is that both the total number of bankruptcy cases and the number of separate disputes within them are growing: if in 2022 there were 1.95 million, then in the first half of 2023 alone there are already 1.21 million, according to the court department at the Supreme Court . A significant part of them concerns the consideration of creditors’ claims for inclusion in the debtor’s register – 548.6 thousand for January-June, and no more than 5% of court rulings on them are appealed.

The new project proposes changes to the bankruptcy procedure for both legal entities and citizens. For the former, the minimum amount of debt that allows one to initiate a bankruptcy case increases – from 300 thousand to 2 million rubles; the authors of the amendments explain the new figure, including the inflation accumulated since 2002. In addition, the bar for bankruptcy of a citizen (500 thousand rubles) is now higher than for a legal entity. In the second case, spouses of debtor citizens become full participants in the bankruptcy case, and managers have the right to receive information about their assets. In addition, the procedure for selling citizens’ property will be approved not by the court, but by a meeting of creditors.

Changes are also awaiting the AU in terms of interest payments. The amendments establish the ability of the court to reduce the amount of interest at the request of a participant in the case “in exceptional cases” and “if it is clearly disproportionate to the contribution of the entity to achieving the results of the bankruptcy procedure.” At the same time, interest in the amount of up to 100 thousand rubles. managers are allowed to pay themselves. Remuneration above this amount must be approved by the court, but in the amount of up to 1 million rubles. the judge can do this in a simplified manner without holding a meeting, calling the parties and making a reasoned decision.

In the same simplified procedure and without motivation, the court will be able to resolve a number of separate disputes within the framework of bankruptcy, if no objections are received from the participants in the case. Among them are questions about the inclusion of creditors’ claims in the register, about the release of the agency from obligations on its initiative, about the distribution of legal costs, about the reclaiming of documentation and valuables of the debtor, about the extension of external administration (bankruptcy proceedings are proposed to be extended automatically). A unified procedure for appealing court rulings is also established – a month for appeal and a month for cassation.

“The proposed changes have been discussed for a long time and are long overdue,” says Forward Legal lawyer Evgeniy Zubkov. The amendments consolidate both innovations and approaches already established in practice (requesting evidence, reducing interest rates, etc.), notes Anton Krasnikov, partner at Sotheby’s law firm. He positively assesses the draft of the Supreme Court, believing that “the proposed methods for optimizing the process will allow consolidating the time and professional resources of the judiciary to resolve more labor-intensive disputes, which will undoubtedly affect the quality of justice.”

Simplification of the consideration of many simple disputes and the automatic extension of bankruptcy proceedings is “reasonable and justified,” says Valeria Gerasimenko, Chairman of the Council of the Union of Autonomous Institutions of the National Center for Regional Disputes: “This eliminates unnecessary actions, relieves the burden on the Autonomous Institution and reduces unnecessary costs and expenses, in general makes the procedure more economically feasible for managers, which implies a greater willingness of market professionals to participate in such complex cases.” At the same time, the head of the bankruptcy practice of the Yur-Project company, Viktor Panchenko, believes that instead of the possibility of restoring the period for including a creditor, it is better to simply increase this period without the right to restore it in order to “eliminate legal uncertainty, when even after a year the amount of debt on the register can significantly grow up.”

Managing partner of the Center for Working with Troubled Assets, Zoya Galeeva, supports the idea of ​​simplified inclusion of creditors’ claims in the register, although she believes that transferring these powers to the AC (as proposed in the previous project) “would have a greater effect” in terms of reducing the burden on judges. However, Sergey Domnin clarifies AU, Art. 71 of the law still allows creditors’ claims to be considered without calling the parties, “but the courts have not used this”: “Therefore, one can hardly expect a sharp increase in demands for inclusion in the register or other disputes considered without calling the parties. Most likely, the transition process will be gradual.” At the same time, Mr. Domnin is confident that the option not to write a reasoning “will become very popular” with judges, especially since “the majority of rulings will not be appealed.”

Proposal to increase the debt threshold for initiating bankruptcy of a legal entity to 2 million rubles. lawyers assess differently. Forward Legal lawyer Evgeny Zubkov welcomes this idea: “This will somewhat reduce the flow of bankruptcy filings.” “We need to bring the external signs of bankruptcy (including the amount of debt) in line with the current price level and stop the practice of using bankruptcy as a tool to force the debtor to fulfill an obligation,” adds Anton Krasnikov. Zoya Galeeva recognizes the need to raise the bar, but considers “a one-time and such a significant increase in the amount unnecessary,” adding that this does not prevent affiliated creditors, as before, from “initiating proceedings based on court orders and gaining control over bankruptcy.”

Viktor Panchenko approves of the AU’s right to pay itself small interest without going to trial: “Today, the AU’s monthly remuneration amounts are so low that they cast doubt on the possibility of its real independence.” But the amendments will not eliminate the problem completely, the lawyer clarifies: “Under current conditions, the costs of carrying out the procedure are significant; the fee for additional insurance may exceed 10 million rubles. per year in major procedures, and the responsibility of the AU remains high.”

The management companies themselves are concerned about the court’s right to reduce the interest remuneration if it is disproportionate to the personal contribution of the manager. “It is unclear what is considered proportionate, how to determine the cost, assess the proportion and quality of each of the services provided, and as a result, the operating entities find themselves in a position of uncertainty. We need specific criteria to evaluate the work of managers,” Ms. Gerasimenko is sure. Victor Panchenko agrees that “the lack of criteria to reduce the percentage of AC allows for different interpretations and abuses.”

Mr. Zubkov has a positive attitude towards the amendments, but nevertheless notes that “the changes in the law clearly do not keep up with judicial practice, as well as the ingenuity of debtors, who are coming up with new ways to withdraw and hide their assets.” Therefore, in his opinion, “work on improving the bankruptcy law needs to be intensified” and the possibility of adding other rules should be considered: “For example, the AU can be given the right to receive data on the property of not only the spouse, but also the debtor’s children.”

Anna Zanina