Moratorium on initiating bankruptcy proceedings

06 April 2020
Nikita Ballo
Junior Associate
Alexander Popelyuk
Partner

The moratorium is introduced in the following way:

  • suspension on the duty to file for bankruptcy for debtors affected by the coronavirus
  • creditors are not allowed to initiate a bankruptcy petition, charge penalties and fines for breach of contracts of such debtors
  • prohibit creditors from enforcing their collateral interests for a default on payments by debtors affected by the coronavirus
  • prohibit debtors from paying dividends to shareholders, income by shares, distribution of profit between the shareholders
  • prohibition on offset of counterclaims if the priority of creditors’ claims is breached
  • suspension of ongoing enforcement proceedings on property claims arising prior to the introduction of the moratorium
  • creditors’ meetings can be held in absentia regardless of attribution to affected debtor

Moratorium aftermath

If the affected debtor becomes bankrupt within three months after expiration of moratorium:

  • all non-ordinary transactions exceeding 1% of the value of the debtor’s assets concluded during moratorium will be declared null and void
  • amicable agreement is allowed on the basis of the out-of-court agreement with separate creditors
  • terms for challenging fraudulent transactions extend in order to cover moratorium period