Bankruptcy amendments to legislation have undergone rehabilitation

The package of amendments to the legislation on bank bankruptcy, adopted yesterday in the second reading, turned out to be somewhat thinner than expected. The reorganization of banks will not be indefinite and free for the state; the Deposit Insurance Agency (DIA) will not be able to challenge all transactions for the withdrawal of assets. But on the other hand, bankers will not freely destroy documentation, creditors of bankrupt banks will be able to receive their funds faster, and clients who have transferred property to the bank for trust management will be able to return it out of turn.

The latest version of the amendments turned out to be somewhat truncated compared to the one adopted in the first reading. In particular, legislators abandoned the idea of making the law on bank reorganization unlimited (its validity ends on December 31, 2014). The latest version of the amendments also did not contain provisions giving private investors the right to rehabilitate problem banks at their own expense (now reorganization is carried out with the direct participation of the state). The provision on reducing the minimum transaction amount that can be challenged within the framework of bankruptcy proceedings has also disappeared - from 1% to 0.1% of the value of the bank’s assets.

Deputies do not rule out that some of the failed amendments may be introduced subsequently as independent projects, but they do not specify a time frame. Meanwhile, one of the developers of the amendments points out that turning the law on reorganization into an act of unlimited validity could help strengthen stability in the banking system right now. And the right of private investors to reorganize banks, if it is suddenly needed, would help save budget funds. “Reducing the minimum transaction amount subject to challenge would be very useful in cases such as, for example, Mezhprombank, whose loan portfolio consists of a huge number of small loans,” points out First Deputy General Director of DIA Valery Miroshnikov. However, in his opinion, it was not worth delaying the adoption of the law for the sake of this amendment. “Current legislation still provides us with the opportunity, albeit not so straightforward, to challenge smaller transactions, and the law adopted yesterday contains many other very useful provisions.”

This, in particular, is a requirement for banks to reflect all transactions and transactions carried out in electronic databases for at least the last five years and the obligation of banks to provide them at the request of the Central Bank. Currently, banks do not have such obligations and, as a result, responsibility for failure to fulfill them. As a result, the databases, if they existed, disappear, as was the case, for example, in the case of Mezhprombank or the Holding Credit Bank, but working with paper media is much less effective, and they are not always preserved. The second significant innovation is the accelerated procedure for transition from bank liquidation to bankruptcy. In such a situation, there will be no need to reconvene a meeting of creditors, elect a committee, or present creditor demands. “The time savings could be at least one and a half to two months, this is significant for creditors,” says Sergei Romanov, partner at the Legal Aid Partnership law office. If this rule were already in effect now, AMT Bank depositors could already receive funds in excess of the state-insured 700 thousand rubles.

The provisions of the bill are also useful, expanding the possibilities of transferring property remaining after settlements with creditors to the bank’s shareholders, the DIA points out, “we are talking about the transfer of property in kind, now this is impossible, but shareholders have such needs.” The transfer of assets and liabilities provided for by the amendments from a bankrupt bank to a healthy player may also be required. “For example, there were banks that showed interest in the branch network of the Coin House Bank and were ready to assume the appropriate amount of obligations, but the current legislation did not allow us to do this,” said Mr. Miroshnikov. According to experts, clarification of the procedure for the return by a bank deprived of a license of property from trust management outside the bankruptcy estate will also be in demand. Currently, this approach is not clearly defined in the law, and there are cases when courts include the claims of such creditors in the bankruptcy estate.

However, despite the large number of amendments adopted, the developers do not intend to stop there. “While the project was being prepared, new needs arose,” says Valery Miroshnikov. “In the transfer of assets and liabilities after the revocation of the license, but before the bankruptcy of the bank, a related idea is for the DIA to be able to assess the assets and liabilities of the bank in advance, even before the revocation of the license, etc. ".

Svetlana Dementieva

Rehabilitation does not last forever