The State Duma passed in the third reading Bill No. 516699-8 “On Amending the Federal Law ‘On Insolvency (Bankruptcy)’ and the Arbitration Procedural Code of the Russian Federation (On Improving the Procedure for Consideration of Insolvency (Bankruptcy) Cases)”.

Simplification of bankruptcy procedures for certain types of isolated disputes

The application of documentary proceedings in arbitration courts is being expanded, under which stand-alone disputes will be considered by a judge alone without holding a court session and summoning persons participating in a bankruptcy case on the following issues:

  • consideration of the application for distribution of court expenses and expenses for payment of remuneration to arbitration managers in accordance with Article 59 of the Federal Law “On Insolvency (Bankruptcy)”;
  • extension of the term of external management;
  • extension of the term of bankruptcy proceedings;
  • reclamation of documentation and valuables of the debtor;
  • on the release of the arbitration manager from the performance of his duties.

At the same time, within the framework of consideration of isolated disputes, the arbitration court on its own initiative or upon a reasoned request of the persons participating in the bankruptcy case and in the bankruptcy proceedings will be entitled to appoint a court hearing with summoning the persons participating in the bankruptcy case.

As a result of consideration of such a dispute, the arbitration court will be able to issue a ruling only in the form of the operative part.

At the same time, it will be possible to obtain a reasoned judicial act, which will be produced within five days from the date of receipt of the relevant application.

Increase in the minimum amount of creditors’ claims for the initiation of bankruptcy proceedings against a legal entity

The amount of the minimum debt for initiation of bankruptcy proceedings of legal entities by the court as a general rule will be significantly increased – from 300 thousand rubles to 2 million rubles.

The minimum amount of 3 million rubles will be set for the initiation of bankruptcy proceedings for the following claims

  • against an agricultural organization (currently it is 500 thousand rubles according to Article 177 of the Federal Law “On Insolvency (Bankruptcy)”);
  • to a strategic enterprise or organization (currently 1 million rubles, Article 190 of the Federal Law “On Insolvency (Bankruptcy)”);
  • to a natural monopoly entity (currently – 1 million rubles, Article 197 of the Federal Law “On Insolvency (Bankruptcy)”).

Electronic filing of creditors’ claims for inclusion in the register

For the purposes of participation in the first meeting of creditors, creditors will now be entitled to submit their claims against the debtor to the arbitration court only in electronic form (Article 71 of the Federal Law “On Insolvency (Bankruptcy)”). Currently, claims can be submitted on paper.

Unified time limit for filing an appeal for a number of judicial acts

It is envisaged to unify the appeal procedure by introducing a single (one-month) term for appealing against determinations on the results of consideration of disagreements, applications, petitions and complaints, as well as in resolving other separate disputes in a bankruptcy case. The one-month appeal period will be calculated from the determination (amendments to Article 61 of the Federal Law “On Insolvency (Bankruptcy)”).

Currently, different periods are established: for example, rulings issued by an arbitration court in insolvency (bankruptcy) cases and the appeal of which is provided for by the Arbitration Code of the Russian Federation and other federal laws governing insolvency (bankruptcy), separately from the judicial act that ends the consideration of the case on the merits, may be appealed to the arbitration court of appeal within ten days from the date of their issuance (Art. 223 of the Arbitration Code of the Russian Federation), and other rulings of the arbitrator of the arbitration court may be appealed to the arbitration court of appeal within ten days from the date of their issuance (Art. 223 of the Arbitration Code of the Russian Federation).

Citizens’ bankruptcy

Changes are also envisaged in the area of citizens’ bankruptcy: spouses of citizens in respect of whom bankruptcy proceedings have been initiated will acquire the status of a person participating in a bankruptcy case, and the trustee in bankruptcy will have the right to obtain information on their property and deposits without prior application to the arbitration court, as well as to obtain information on the relatives of such a citizen and their property in court without a court hearing.

Entry into force of the amendments

The amendments will come into effect from the date of official publication of the new Federal Law.

The amendments on the procedure for consideration of isolated disputes will apply to applications filed after the entry into force of these amendments, regardless of the date of introduction of the procedure in a bankruptcy case

The new provisions of Article 61 of the Federal Law “On Insolvency (Bankruptcy)” on a single time limit for appeal will apply to judicial acts adopted after the date of entry into force of these amendments.

Document: Bill No. 516699-8 “On Amending the Federal Law ‘On Insolvency (Bankruptcy)’ and the Arbitration Procedural Code of the Russian Federation (On Improving the Procedure for Consideration of Insolvency (Bankruptcy) Cases)”.