News date: 22 June 2019
Dmitry Konstantinov, the Counsel of Ilyashev & Partners Law Firm and Head of Insolvency and Financial Restructuring Practice in Russia, delivered a speech at Pravo.ru Conference “Bankruptcy-2019: In Search of Balance” held on 21 June 2019 in Moscow.
In his report called “Bankruptcy as a Vaccine. How Should the Legislation Be Changed to Make Bankruptcy Work for the Debtor’s Rehabilitation?” Dmitry criticized the general approach to bankruptcy procedures in Russia, which generally comes down to the statement about the effectiveness of rehabilitation procedures (sanation). Yet, this approach remains declarative only, since rehabilitation procedures are used extremely rarely. At the same time, Dmitry put forward three messages:
“Firstly, we have no such thing as sanation. Secondly, the majority of jurisdictions have no such thing as sanation. And thirdly, do we need financial rehabilitation as such? Is our market ready for the real sanation? – said Dmitry Konstantinov. – After all, in most cases sanation means that the creditors’ claims will be forcibly settled. Sanation usually takes place not to help the creditors, but to save the sanated business. And, generally speaking, to save at any cost”.
Within the framework of conference Dmitry Konstantinov also moderated session “Organization of the Company’s Work During Participation in the Bankruptcy Proceedings. Cases”.
The conference participants discussed novations in current legislation and general trends in the development of bankruptcy practices.