A panel discussion entitled ‘A Life without Bankruptcy: Saving and Revitalizing Businesses Here and Now’ will take place within the business programme of the anniversary 10th St. Peterburg International Legal Forum. The discussion is part of the LAW, BUSINESS, AND SANCTIONS block and is of particular relevance for contractors, consumers, employees and the state during the current economic realities.
Is it possible to avoid bankruptcy and save a business in a difficult financial situation? Often it is easier for creditors to go to court citing debtor bankruptcy than to spend resources on financial analysis and finding out the real possibilities of getting their money back. The reason is that counterparties are limited in ways of obtaining reliable information about financial and economic activity of the debtor. As a result, they often end up with irrelevant or completely erroneous understanding of the situation.
Creditors are often distrustful of financial difficulties, so they choose to sell off debtor’s assets as soon as possible. However, despite its apparent simplicity and certainty, this solution almost never leads to the full repayment of debts. On the contrary, both the debtor and the creditors together are drawn into a long and expensive liquidation procedure. Moreover, the statistical data shows that it reduces the chances of all its participants to repay debts, preserve working and cooperative ties, and brings down the technological potential in the economy overall.
At the same time, business recovery is only possible when both parties trust each other. It can be achieved through open negotiations and the formation of a verified expert opinion. Expert opinion may serve as a basis for management decision-making, when it derives from data collected in various sources and when that data is cross-compared. The sources of such data may be tax authorities, credit organizations, and the actual debtor.
Representatives of public associations, expert and business circles, and authorities jointly prepared a project to create a debt restructuring support platform to help businesses to settle debts and restore financial sustainability.
The proposed project envisages the involvement of impartial experts and coordination through a single centre, independent of the potential participants in the agreement. Thus, experts could develop a professional opinion, which enjoys credibility and authority. At the same time, this platform could host developed expert opinion discussions in course of conciliation between creditors and the debtor.
“Eagerness to establish dialogue and mutual trust is the way to preserve and develop business,” said Konstantin Chekmyshev, Deputy Head, Federal Tax Service of the Russian Federation.
Vadim Soldatenkov, Head of the Bankruptcy Proceedings Department of the Federal Tax Service of Russia will moderate the session. Representatives of credit institutions, public organization, and academic community will share their vision of the problem.
SPILF 2022 business programme is available at the Forum’s website: legalforum.info.
