Sergei Levichev, Head of Bankruptcy Practice, told Corporate Lawyer magazine about new norms on the subsidiary liability of controlling persons
The Law On Bankruptcy was supplemented with Chapter III2 on the issues of the liability of the controlling persons of debtor (CPD).
Amendments were introduced by the Federal Law No. 266-FZ dated July 29, 2017 entered into force on July 30, 2017 (date of official publication), but with retroactive effect it applies to the applications filed starting from July 1st, 2017.
The new rules, on the one hand, systematize and develop the idea of the reform of subsidiary liability undertaken in December 2016 (Law No. 488-FZ). On the other hand, they contain a number of revolutionary ideas that can fundamentally change the judicial practice and models of doing business in Russia.
Clarified the definition of the controlling person.
Among others, Chief Accountant, Chief Financial Officer, relatives or relatives in-law or by marriage of the head or members of the debtor's management bodies may be held accountable, provided that these persons have determined the actions of the debtor. Moreover, arbitration tribunal has the right, at its discretion, to recognize the person as controlling the debtor for other reasons.
According to statistics, enforcement of court decisions on bringing CPD to subsidiary liability does not exceed 1%. The norm giving a chance to the nominal managers or founders of the company to avoid liability in exchange for providing information about the actual beneficiaries of the bankrupt and assistance in finding the property is designed to reverse the situation.
What has changed in the Law On Bankruptcy in terms of subsidiary liability of controlling persons.pdf