Sberbank expert proposes to simplify the bankruptcy procedure for enterprises

Sber voiced proposals to improve the efficiency of the bankruptcy procedure. The proposed approach will help reduce the period of bankruptcy for enterprises by almost a year, reduce procedural costs and increase the return of assets to the economy, the bank’s press service reports.

Senior Managing Director and Head of the Department of Compulsory Collection and Bankruptcy of Sberbank spoke about this Evgeniy Akimov at the conference “Bankruptcy, restructuring, corporate conflicts.”

– The bankruptcy process, which consists of different stages, shows a tendency to increase the time it takes to complete them. Thus, the duration of the observation stage, when the value of assets is determined and a strategy for repaying debts is developed, has increased by a month over the year. If we talk about bankruptcy proceedings, the period has already increased by three months and totals 38 months. In general, over six years, the period from the beginning of bankruptcy to the sale of assets has increased by four months. Taking into account inflation, this is a serious reduction in the cost of funds returned to economic circulation,” said Evgeny Akimov.

However, as Evgeny Akimov noted, it is possible to make changes to the current process. First, we need to make the observation procedure optional. In fact, this is implied by the new Supreme Court bill. If at the stage of consideration of the application a competition is immediately introduced, bypassing observation, the path to the return of assets to the economy will be shortened by seven months. Statistics confirm the legitimacy of this approach: in 99% of cases, based on the results of observation, bankruptcy proceedings are introduced.

The Bank also drew attention to the need for a complete review of the bidding procedure. 10 years of data show that in 96% of cases, first and second bids end in failure, and the property is sold only through a public offer. It is necessary to move to the Anglo-Dutch auction model and make it possible to reduce the price from the first stage if there are no bidders with a proposal to increase it. This mechanism will shorten the period by at least another three months.

And one more change to make the bankruptcy process more efficient: adjustments to asset replacement. It is necessary to allow the creation of an LLC, and not just a JSC, on the basis of the debtor’s assets.

– We believe that changes in monitoring and trading timing are long overdue. These three fairly simple proposals can seriously affect the effectiveness of bankruptcy. They are needed and beneficial for the state, society, and creditors,” commented Evgeny Akimov.