Experts from Russia, Great Britain and Germany have discussed bankruptcy procedure issues and details under the conditions of the coronavirus pandemic within the framework of St. Petersburg International Legal Forum.
Opening the session Rustem Miftahutdinov, moderator, Associate Professor at Department of Administrative and Financial Law of St. Petersburg State University, Associate Professor at Russian School of Private Law of Research Center for Private Law under the President of the Russian Federation named after S.S. Alekseev, noted that since April 3rd Russian legislators had introduced a new standard which enabled the government to define a set of people whom bankruptcy moratorium can be applied to. Currently there are almost 1,5 million companies and individual entrepreneurs on the list.
‘In Germany we use an approach which focuses on liquidity. That means that we don’t introduce special moratoriums,’ emphasized Madaus Stephan, Professor of Law at Martin Luther University Halle-Wittenberg.
According to him such practice is a successful one and other countries should take this experience into consideration. ‘It’s expedient to pay attention to liquidity provision the way Germany does and keep searching for something that can be done next month or in a couple of months to defer payments. Business should be given an opportunity to take a deep breath without being urged to shut down or undertake emergency measures during such a period,’ he said.
Eugenio Vaccari, Lecturer at School of Law, University of Essex, also noted that a moratorium hadn’t been introduced in Great Britain. ‘The government is undertaking a number of measures. Some of them are targeted at liquidity injection like it is done in Germany. For instance, this involves provision of emergency loans, postponing payment of taxes, such as VAT. There are specific measures connected with bankruptcy. Temporary suspension of production taxes is one of them,’ he said.
However, the expert hasn’t considered all British measures successful. ‘One of the measures taken by my government has a retroactive effect. The government considered expedient to suspend all the hearings and acts, even malicious ones, during the epidemic. A liquidator and administrator can’t bring an action against a director because of irregular or unlawful trade during the period of March 1st - June 30th. I don’t think this measure was needed. Now it’s extremely difficult for parties filing a lawsuit to prove that the company could have avoided insolvency but its director hasn’t done everything to reduce the losses,’ underlined Eugenio Vaccari.
Concluding the session Rustem Miftahutdinov noted that we were to thank the virus. Everyone is blaming it but in many fields it has revealed those things which hadn’t been very good. Let’s look for something positive in any situation. We need to provide additional protection for debtors, thus, the pandemic will facilitate the development of rehabilitation procedures both in Russia and abroad,’ summarized Rustem Miftahutdinov.
St. Petersburg International Legal Forum 9 ½: The Rule of Corona is taking place online on April 10-12th. Heads of Russian and foreign authorities, legal experts, scientists, politicians and journalists are taking part in virtual discussions. The main topic of the forum is dedicated to legal aspects of public and business life under the conditions of the COVID-19 pandemic.