Support of bankruptcy procedures, judicial protection

Supporting the bankruptcy procedure: subtleties and nuances of an important matter

There are situations in enterprises, companies, and organizations when bankruptcy proceedings are inevitable.
Failures in work occur for various reasons - short-sighted actions of management, lack of government orders, lack of demand for products, impossibility of reconstruction. Serious debts arise on loans, taxes, utility bills, wages, obligations for which the company is not able to pay on its own. Then a decision is made to carry out bankruptcy proceedings. All activities must be accompanied by the strong support of competent lawyers. The insolvency law prescribes the collection of a package of documents and the implementation of several stages of bankruptcy. At each of them, the situation can be reversed and the company can be protected from liquidation. Lawyers play a huge role in this, and it is recommended to hire them to accompany the bankruptcy procedure.

Types of services provided by lawyers in bankruptcy

Drawing up an application to the Arbitration Court to declare an enterprise, LLC, individual entrepreneur, or individual bankrupt.
Collection of the necessary package of documents and transfer to the Arbitration Court.
Representing the interests of a bankrupt at court hearings.
Verification of all claims against the debtor.
Actions in the interests of the bankrupt - reducing the amount of payments, collecting documents that will have a positive effect on reducing the amount of debt, interest, and penalties.
Timely provision of documents on paid invoices.
Participation in and control over the preparation of a payment schedule for restructuring. Achieving longer periods of time to raise funds to pay off debt.
Advocating for the client's interests at meetings of creditors.
Control over the priority of payments to creditors in order to avoid unnecessary claims and lawsuits in court.
The lawyer accompanies all types of transactions during restructuring in order to eliminate fraudulent activities during such a difficult period of the company’s activities.
Participation in the inventory of the debtor’s property and holding auctions for the sale so that it is not sold for pennies.

Bankruptcy support is an important component of the procedure, because a lawyer acts in the interests of his client and seeks compliance with his rights within the framework of the law. The specialist advises on all issues and participates in resolving controversial situations. Problems sometimes arise even after the decision of the Arbitration Court comes into force. Lawyers provide for any outcome of the case, bringing it to its logical conclusion.

Who may need bankruptcy support services?

Individuals are citizens of Russia.
Individual entrepreneurs.
Legal entities - private, state, municipal.

The bankruptcy procedure is initiated by the debtor or creditor. Insolvency can be real or imaginary, when financial obligations are evaded under the guise of bankruptcy. Sometimes lawyers have to prove that the client provided genuine information and has no reason or motive to deceive government authorities.

Why you should use a bankruptcy support service

The bankruptcy procedure is not a momentary matter, but a process that takes an average of up to 3 years. Turning to specialists is also safe. Lenders are different. Many obey the decision of the Arbitration Court and wait their turn to pay the debt. But others hire debt collectors who systematically threaten the debtor, although during bankruptcy any type of filing of claims is prohibited by law.

Legal support for bankruptcy is not cheap. The price starts from 100 thousand rubles and depends on the complexity and duration of the process. Complete liquidation of a company without consequences and problems can cost half a million rubles. But it is worth it, because control over the actions of the appointed managers does not allow the debtor to be accused in vain of fictitious bankruptcy or to sell the property at a reduced price.

Why does a creditor of a debtor company need a lawyer?

The most important thing is that the services of a lawyer are required by both the debtor and the creditor. The lawyer has the right to participate in drawing up a payment schedule to the creditor and keep the client’s interests as a priority. But before this, it is important for the creditor to submit a well-drafted claim to the Arbitration Court within a certain time frame. After the start of the procedure, when all creditors have been identified, according to the law, other payments are suspended or not taken into account at all. The creditor has to pay for the services of a lawyer, but he gets rid of going to authorities to collect documents and attending court hearings. Legal support guarantees the receipt of funds from the debtor in full, albeit sometimes with some time delay.

To conduct a bankruptcy case for an individual, a package of documents is collected and an application is drawn up to the Arbitration Court. With legal entities, everything is more complicated, because responsibility lies not only with the manager, but also with all owners according to the principle of subsidiary liability. If creditors have the slightest suspicion of a fictitious bankruptcy, the founders face criminal penalties. Often such accusations are unfounded, but this can only be proven with the help of a competent lawyer. When bankruptcy enters the final stage, it is not the end. The liquidation of a company is coming, where there are many subtleties that need to be foreseen and not made mistakes.

What can a lawyer do?

The main result of bankruptcy is to help the debtor get rid of exorbitant debts that, for one reason or another, he cannot repay. An incorrect decision or unprofessional assistance can lead to civil, administrative and even criminal liability for the manager, founders, and members of the board of directors. To avoid this, choose professionals in your field.

Do you need the help of a corporate bankruptcy lawyer?

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What a good lawyer can do:

- to be a representative of the debtor in court, which means:

participate in court when challenging the debtor's transactions ,
challenge in court the illegal actions of the arbitration manager ,
appeal in court against illegal decisions of the meeting of creditors ,
protect the founders and managers of the debtor in attempts to accuse them of fictitious or deliberate bankruptcy, when bringing them to subsidiary liability,
object to the claims of creditors if there are appropriate grounds,
advise the debtor's managers in the monitoring procedure in order to avoid transactions that may be contested ,
protect the interests of the debtor during the inventory of his property and holding auctions.

Who initiates bankruptcy and why?

An application for bankruptcy to the Arbitration Court is submitted by the manager on behalf of the company or his creditors. Founders, owners, and investors of a legal entity have the right to initiate bankruptcy. The following have the right to apply to declare a company bankrupt: the Tax Service, the Pension Fund, and Social Security, if there are large debts on mandatory payments. Employees of the prosecutor's office identify the bankrupt during prosecutorial checks. Company employees have the right to identify a problem if wage arrears are more than 3 months. The prerequisites for this decision are the following conditions.

The legal entity's debt on payment documents amounts to more than 300 thousand rubles.
The debt has been with the company for more than 3 months.

The director or founder of the company is obliged to obey the decision of the Arbitration Court, if they are not the initiator of bankruptcy. It is not recommended to use the procedure to carry out forced reorganization and transition to a new type of product. This method is considered a gray method and a hidden imaginary failure. The arbitration court recognizes such actions as invalid and returns the company's status to its original position.

Goals and objectives of declaring bankruptcy

The purpose of declaring a company bankrupt is not initially to completely liquidate it. For many enterprises, this is the opportunity to obtain a deferment and systematization of payments, which allows you to get rid of simultaneous claims from all creditors. They are prioritized according to the degree of debt. From the moment the bankruptcy procedure begins, the accrual of penalties for overdue time stops, which makes it possible to reduce the debt burden. For a set period of time, the company continues to operate as usual, which makes it possible to receive orders, increase profits and pay off debts without selling property or liquidating the enterprise. During this time, management is limited in its actions, but is not prohibited from seeking reserves and attracting investors. You can contact representatives of regional authorities. If the leadership of a district or region is not interested in closing companies and enterprises, especially producers of primary products, then subsidies and injections of funds from the regional budget are possible.

Why should an accompanying lawyer be a guest and not a full-time employee?

In difficult situations, company managers often let things take their course or entrust control to an in-house lawyer. Why pay invited specialists when the organization is already in debt. This wrong decision leads to collapse. An in-house lawyer does not have the knowledge or experience in such matters. Sometimes you simply lack the initiative and perseverance to resolve the situation in your favor. To handle bankruptcy support cases, they hire an arbitration lawyer who specializes only in such issues. The specialist has 100% knowledge of the material and procedural components of bankruptcy. By appealing to the facts and the letter of the law, an arbitration lawyer is able to lead both parties to a settlement agreement and achieve mitigation of conditions for the debtor.

A specialist should be invited as soon as the owner considers the issue of insolvency, when creditors or a third party insist on bankruptcy proceedings. This factor plays into the hands of the debtor, who gets a real chance to get out of the situation without loss of reputation and liquidation of the company. If a full-time lawyer controls the procedure, such results will not be achieved. A situation may occur when the company is voluntarily handed over to creditors. Then the issue cannot be resolved peacefully.

Support during real and temporary bankruptcy procedures

Temporary insolvency - during periods of crisis such cases are the most common. An economic downturn or a sharp change in the market affects the company's performance. A large debit debt is formed, which cannot be repaid using profits, since there is very little of it. As part of bankruptcy, it is possible to restore solvency and reach a settlement agreement with creditors.
Real bankruptcy - the company cannot cope with the situation on its own. Investors have not shown any attention to the legal entity; there are no government orders. All that remains is to sell the property for debts.

Settlement agreement

Peaceful resolution of all issues during bankruptcy is the best thing for all participants in the process, since the procedure can last a very long time. Counterparties can agree on a deferment, debt restructuring, etc.

In this case, the bankruptcy process stops. The decision on a settlement agreement is made by all creditors and other interested parties, and must be approved by arbitration.

The specialists of the Alfa consulting group have extensive experience in handling insolvency cases of enterprises and organizations, individuals or individual entrepreneurs.

We thoroughly study each case, monitor all legal nuances and offer the best scenario. As part of the bankruptcy process, we are ready to represent both the interests of the debtor and the interests of the creditor.

The lawyers of the Alfa consulting group are professionals with high competence and many years of experience in this field of activity, who will promptly carry out the entire bankruptcy procedure in accordance with the law.

We take all possible measures to protect the interests of our clients. Our company’s specialists will find a way out of the most difficult situations.

Simplified bankruptcy procedure: step-by-step actions

In our country, according to statistics, 50% of debtors prefer a simplified bankruptcy system. Therefore, it is worth talking about this separately.

The simplified system is used when the debtor has no property, the company does not have a production process, and there is no cash flow in any categories. It is useless to give deferments or draw up a payment schedule; this will enable the debtor to escape from the country. The existing property, even if sold at the average market price, will not be enough to repay all creditor claims. Therefore, bankruptcy begins as if from the end, that is, with the liquidation of a legal entity.

Creditors, government agencies, and the tax service are officially notified of the liquidation of the company.
A specialized organization begins work that carries out liquidation of bankrupts.

If the owners are interested in filing bankruptcy quickly, they must understand that they will have to pay all debts in any case. Declaring a company bankrupt does not relieve one from paying debts if there is insufficient commercial property to do so. A simplified scheme can be implemented if creditors are satisfied with this outcome of the case.

The simplified bankruptcy procedure goes like this.

The arbitration court makes a decision on bankruptcy.
The opening of competition proceedings for a period of 6 months is announced.
A bankruptcy trustee is appointed.
An inventory and assessment of the debtor's property is carried out.
Bidding and repayment of debts are carried out in the order of priority.

A subtle nuance that the owners are counting on is the repayment of the claims of creditors who did not have enough funds to pay the debt after the sale of the property. The arbitration court receives a report on the current state of affairs and makes a decision to liquidate the company. After this, an entry is made in the Unified State Register of Legal Entities.

Management mistakes that lead to serious consequences

A clear example of why an arbitration lawyer is needed to support bankruptcy. If, before making a decision on liquidation, it turns out that the bankruptcy procedure has been completed, and the package of documents has been collected with shortcomings, then it will be impossible to complete the procedure! It will not be possible to return everything to its original position. Registration of documents again does not make sense. This is where the danger of subsidiary liability arises, when the manager, owner, and co-owners are obliged to share losses and sacrifice their personal savings or property.

Legal support includes

preparing an application to declare the debtor bankrupt on behalf of the creditor or on behalf of the debtor;
representation in the arbitration court, protection of the rights of creditors or the debtor, his employees, including preparation of the necessary petitions, statements, complaints and claims;
conducting a qualified analysis, audit of the financial condition of the debtor, its activities (for any forms of reporting);
preparation of an expert audit report on the subject of fictitious or deliberate bankruptcy of an organization;
maintaining a register of creditors' claims, consulting and preparing a report of the arbitration manager, as well as organizing and holding meetings of the creditors' committee;
conducting an inventory of the debtor’s property, conducting an independent assessment of property, assistance in conducting auctions;
consultations on the sale of the debtor’s property on electronic trading platforms (through open auctions in electronic form);
collection of the debtor's receivables;
making changes to constituent documents and other actions related to obtaining certificates and extracts from the Unified State Register of Legal Entities.

The cost of our services is available to any client who has decided to initiate bankruptcy proceedings, and the possibility of staged payment significantly reduces the financial burden and ensures that our work is paid based on its effectiveness. We provide comprehensive support for bankruptcy procedures at all stages, starting from any stage of the process, supporting the process until all legal requirements of the Customer are met.

Simplified bankruptcy scheme due to the absence of a debtor

The applicant for recognition of bankruptcy due to the absence of a debtor is the prosecutor's office or the tax service. This situation is revealed during inspections to detect accumulated debts on taxes and utility bills. During the investigative activities, it turns out that the legal entity does not operate at the place of registration, there is no movement of funds in the accounts. Using the contacts provided, it is impossible to find the head and accountant of the company. The debtor does not have assets to cover the costs of conducting bankruptcy cases in the standard mode. The appointed temporary manager conducts a simplified bankruptcy procedure. The case is reviewed and closed within a month.

Pros and cons of simplified bankruptcy for the debtor and creditor

Debtors benefit most from the simplified system. A financial analysis of the bankrupt’s condition under this scheme is not required. It is impossible to determine with certainty whether the company is truly insolvent or whether it is possible to restore solvency, but this information is not disclosed by the owner. After a bankruptcy decision is made, creditors will not be able to challenge it if the company does not have enough funds to pay off its debts. After notification of the procedure, creditors are given only 1 month to submit their claims. In a simplified version, the implementation period for the entire project is 6-9 months. The debtor's savings on lawyer services and legal proceedings amount to up to 50%. But even for a bankrupt, there is a risk of bringing the owners, founders or managers to subsidiary liability.

Subsidiary liability in case of bankruptcy of a company

80% of problems in companies that lead to bankruptcy are associated with incompetent actions of managers or owners. In some cases, their property and savings are used to pay off debts.

By agreement with the director or owner of the debtor company. An agreement is drawn up on behalf of.
Legislative form - established by the Arbitration Court forcibly on legal grounds.

Vicarious liability applies not only to legal entities, but also to individuals. A striking example of this is the repayment of a loan by guarantors if the borrower is declared bankrupt.

What criteria do you use to choose a lawyer to assist with bankruptcy?

Before contacting a lawyer, pay attention to his portfolio. If you are an individual, and the specialist’s track record only includes bankruptcy work with legal entities, is it worth contacting him? An independent lawyer is no worse than an employee in a prestigious company, if you have the experience required in your field. For many specialists, results and reputation are important, so they take payment upon completion of the case. If you are asked to make a 100% advance payment, this is a reason to think about it. If you need to pay for a consultation, then you are faced with a novice lawyer who does not have the funds. If this is a legal entity, then it itself is on the verge of bankruptcy. There are frequent cases of fraud in the field of legal services. Therefore, read the contract carefully and do not sign documents that contain footnotes in small print. Honest companies and lawyers list all services in the price list, provide free consultations, have good experience, specialized education, and systematically take qualification courses in Russia and abroad.

TOP 5 legal firms providing assistance in bankruptcy

National Bankruptcy Center - head office in Moscow, a number of regional offices. Free online consultations. Payment based on results, payment in installments for a year without interest. Support for legal entities.
STOP loan - support for individual entrepreneurs and individuals. Large regional representative office, head office in Moscow.
All-Russian Bankruptcy Service - support of bankruptcy of individuals and individual entrepreneurs. Free telephone number for consultations in Russia. Branches in major cities of the country.
Lawyer consultation - office in St. Petersburg, branches throughout Russia. Consultations are paid, but each visitor sees the prices at each window with a lawyer, and can choose a specialist according to his pocket.
TsVD - 24 regional branches, dealing with all types of bankruptcies.