Company bankruptcies: current trends

In recent years, an important trend in the evolvement of Russia’s legislation has been the increasing level of responsibility of companies’ CEOs and controlling entities as a result of the introduction, in 2017, of a new chapter in the Law “On Insolvency (Bankruptcy)”, titled “Responsibility of the debtor’s CEO and other individuals and entities in a bankruptcy case”, and the subsequent rapid increase in the number of cases where the latter were brought to subsidiary liability. Within the framework of that chapter, additional (subsidiary) liability of a company’s CEO and the individuals and entities controlling the company is envisaged; the latter can be recognized to be the those who (both individuals and legal entities) for not more than 3 years prior to the emergence of signs of bankruptcy (as well as after their emergence and prior to the receipt, by an arbitration court, of the petition concerning the recognition of the debtor to be bankrupt), had enjoyed the right to issue to the debtor instructions that the latter was obliged to implement, or had had “the ability to otherwise determine the actions of the debtor, including the execution of transactions and the determination of their terms”.