Institute of bankruptcy in the Russian Federation: establishment and ways of development of the legal provision

   Objective: to study the issues of regulation of bankruptcy relations and to determine the ways of further development of the legal field in this sphere.

   Methods: historical method, logical and structural analysis, system-functional approach, formal-legal method.

   Results: the article considers formation of the bankruptcy institute in the Russian Federation. In addition, the modern state of legal support in this field is analyzed. The peculiarities of the Russian model of bankruptcy regulation are outlined. Further, the author emphasizes the current problems in the regulation of bankruptcy relations in the Russian Federation. In particular,
the author notes that the procedures aimed at restoring the solvency of debtors are not in demand in practice. The study also emphasizes the problem of a relatively low percentage of satisfied creditors’ claims as a result of bankruptcy procedures. An assessment is given of the current project of changing the legal field in this area proposed by the legislator. The ways of further development of bankruptcy legislation are defined.

   Scientific novelty: consists in the complex nature of the study of bankruptcy relations. In particular, the research provides a new development of theoretical provisions, as well as practical recommendations to improve legal regulation and increase the effectiveness of the bankruptcy institute. It is established that today there is a smooth transition from the pro-debtor model of bankruptcy relations, which was previously dominating, to a more balanced mechanisms of insolvency regulation from the viewpoint of creditor and debtor interests. It is also argued that it is necessary to abandon the financial rehabilitation and external management procedures, which actually do not work in practice, and to replace them with a single rehabilitation procedure aimed at restoring the debtor’s solvency.

   Practical significance: a certain theoretical basis was formed, which is necessary both for researching the essence of the bankruptcy institute in the Russian Federation and for developing proposals to adjust regulatory policy in this area in the future.

1. Al-Tawil, T. N. (2019). Piercing the corporate veil: when LLCs and corporations may be at risk. International Journal of Law and Management, 61(2), 328–344.

2. Anderson, H. (2019). Piercing the Corporate Veil to Reach the Money for Employees: Why, How and Where to Next? Company and Securities Law Journal, 36(7), 536–551.

3. Belousov, A. L. (2021). Restoring the financial stability of debtors: changing approaches to legislation. Economic analysis: theory and practice, 20(5), 959–971. (In Russ.). doi: 10.24891/ea.20.5.959

4. Belousov, A. L., & Vasilyeva, S. A. (2022). Issues of bankruptcy regulation: ways of developing legislation. Legal Bulletin, 7(4), 64–71. (In Russ.).

5. Belykh, V. (2017). Recovery of losses caused by unfair practices of bankruptcy manager. Business, Management and Law, 3-4, 65–72. (In Russ.).

6. Dignam, A., & Oh P. B. (2019). Disregarding the Salomon Principle: an Empirical Analysis, 1885-2014. Oxford Journal of Legal Studies, 39(1), 16–49.

7. Egorov, A. V. (2019). Winding-up procedure: comment on key issues. Civil Law Review, 19(1), 114–139. (In Russ.).

8. Elbers, J. (2016). Challenging Prejudice to Creditors Involving Abuse of Separate Identities in Tax Matters; a Dutch Approach. INTERTAX, 44(4), 324–333.

9. Fabian, A. Y. C. (2016). The Precariousness of the Corporate Veil to Avoid the Phenomenon of Fraud in Companies. Revista E-Mercatoria, 15(1), 103–117.

10. Filatova, U. B., & Gorbach, O. V. (2019). The Doctrine of Lifting the Corporate Veil: Some Aspects of Application. Civil Law, 1, 7–10. (In Russ.).

11. Frolov, I. V. (2020). Institute of insolvency (bankruptcy) in the system of Russian law: model and internal structure. Entrepreneurial Law, 1, 30–38. (In Russ.).

12. Golubtsov, V. G. (2020). Subsidiary Liability of Persons Controlling a Debtor: Legislative Approach Evolution. Perm University Herald. Juridical Sciences, 48, 248–273. (In Russ.). doi: 10.17072/1995-4190-2020-48-248-273

13. Gorbashev, I. V. (2018). On some legal material issues in the ruling of the supreme court of the Russian Federation regarding the invocation for subsidiary liability. Civil Law Review, 18(4), 154–202. (In Russ.).

14. He, S. (2017). Improvement on the Initiator and Causes of Current “Piercing the Corporate Veil” System. International Conference on Management, Education and Social Science (ICMESS). Qingdao, PEOPLES R CHINA.

15. Karelina, S. A. (2021). Characteristics and current problems of the implementation of the mechanism of deceased person’s bankruptcy procedure. Academic Notes of the Faculty of Law, 2, 11–14. (In Russ.).

16. Kazakov, A. V., & Kolyshkin, A. V. (2018). The development of bankruptcy prediction models in modern Russian economy. St. Petersburg University Journal of Economic Studies, 34(2), 241–266. (In Russ.). doi: 10.21638/11701/spbu05.2018.203

17. Lauts, E. B. (2018). The law on bankruptcy of credit institutions: the concept and correlation with banking laws. Banking law, 4, 34–41. (In Russ.).

18. Mogilat, A. N. (2019). Modelling financial distress of Russian industrial companies, or What bankruptcy analysis can tell. Voprosy Ekonomiki, 3, 101–118. (In Russ.). doi: 10.32609/0042-8736-2019-3-101-118

19. Oglinda, B. (2015). The Doctrine of Piercing the Corporate Veil. In 10^th International Conference on Accounting and Management Information Systems (AMIS). Bucharest Univ Econ Studies, Bucharest, ROMANIA (pp. 410–420).

20. Petrin, M., & Choudhury, B. (2018). Group Company Liability. European Business Organization Law Review, 19(4), 771–796.

21. Podolsky, Yu. D. (2020). A Procedural reform in bankruptcy: extrajudicial compilation of a register of claims. Arbitrazh-civil procedure, 11, 47–49. (In Russ.). doi: 10.18572/1812-383x-2020-11-47-49

22. Popondopulo, V. F. (2021). The Russian System of the Legal Regulation of Bankruptcy Relationships: The Status and Development Tendencies. Jurist, 5, 10–16. (In Russ.).

23. Ruchkina, G. F. (2022). Some anti-crisis financial measures of support of small and medium-sized enterprises. Banking Law, 3, 29–37. (In Russ.).

24. Shaidullin, A. I. (2023). Protection of Information Rights of the Creditors in the Insolvency Proceedings. Civil Law Review, 23(2), 7–49. (In Russ.).

25. Shishmareva, T. P. (2023). Legal Regulation of Citizen’s Bankruptcy in Russia and Germany. Zakon, 6, 52–62. (In Russ.). doi: 10.37239/0869-4400-2023-20-6-52-62

26. Sizemova, O. B., Pchelkin, A. V., & Mamakov, A. M. (2018). Comparative analysis of the legislation on the bankruptcy of the individuals in Russia and the USA. Journal of Foreign Legislation and Comparative Law, 5(72), 80–87. (In Russ.). doi: 10.12737/art.2018.5.12

27. Suvorov, E. D. (2021). Bankruptcy corporation: on the issue of the potential legal personality of the bankruptcy estate. Vestnik Arbitrazhnogo suda Moskovskogo okruga, 3, 63–89. (In Russ.).

28. Sviridenko, O. M. (2020). Transactions Detrimental to the Creditors beyond the Insolvency Proceedings (Out-of-Court Challenge). Actual Problems of Russian Law, 15(2), 105–112. (In Russ.). doi: 10.17803/1994-1471.2020.111.2.105-112

29. Vitryansky, V. (2015). Bankruptcy of citizens who are not individual entrepreneurs. Economy and Law, 4(459), 3–29. (In Russ.).

30. Warren, M. (2016). Corporate Structures, the Veil and the Role of the Courts. Melbourne University Law Review, 40(2), 657–687.