The catastrophic situation with debt collection has worsened amid the pandemic. In most cases, bankruptcy proceedings only lead to more losses for creditors. Irina Onikienko, Partner at Capital Legal Services, discussed these and other issues of recognizing companies as bankrupt and collecting debt, with participants of the Bankruptcy 2021 business breakfast held by Delovoy Peterburg.

General statistics show that as a result of longstanding and costly proceedings, creditors manage to recover about 5% of debts, and two thirds of the companies turn out to have nothing. “It is almost impossible to revive a business entity through bankruptcy proceedings, so creditors fail to achieve their goals and recover their money. The statutory methods of pursuing debtors and persons who control them in order to reveal assets, including subsidiary liability and personal bankruptcy, unfortunately, rarely lead to debt being repaid. Sometimes desperate creditors just want to make their debtor sweat and deprive them of sleep for at least a few nights,” noted Irina Onikienko at the event.

See more information on the Bankruptcy 2021 business breakfast in Russian in the Delovoy Peterburg journal.