Large business scared by amendments concerning bankruptcy of strategic enterprises

The Ministry of Economic Development submitted in August to the Government the amendments on the draft law on improving the bankruptcy procedure for over 1 thousand strategic organizations.

The draft law itself — "On amendments to the laws “On insolvency (bankruptcy)” and “On executive proceedings” concerning the improvement of the procedures applied in the bankruptcy cases of strategic ventures” – was filed with the State Duma in February of 2011, but did not make past the first reading then. The Government is currently preparing amendments for the second reading.

Alexander Bolomatov, Partner of the Law Firm "YUST", spoke to the RBC newspaper if the new amendments proposed by the Government will enable the State to gratuitously confiscate strategic companies and violated the creditors’ financial rights in the course of bankruptcies: “The procedure of control over bankruptcy proceedings of strategic ventures already exists. The changes will be harmful to the companies themselves. It will be even harder for them to take loans and execute agreements with those limitations. Any transaction with them will now bring trouble. Creditors and suppliers will not want to deal with them; this is unreasonable.”

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