Bankruptcy procedures : financial rehabilitation.

Financial rehabilitation may be introduced if debtor's shareholders or a third party is willing to financially back the company's restructuring and restore its solvency. Financial rehabilitation may last no longer than two years. The court order initiating financial rehabilitation should set a schedule for the repayment of overdue debts.

The debtor's management retains its authority. However, any corporate reorganisation requires a prior consent from creditors and the person(s) who provided security for the repayment of the overdue debts. Any assignments, loans, or transactions that result in an increase of the debtor's accounts payable by more than 5 per cent, or disposal of the debtor's assets, except goods sold or services provided in the ordinary course of business, require a prior consent of the administrative manager appointed by the court.

From the moment of introduction of financial rehabilitation, the insolvent company is relieved from paying financial sanctions for non-performance or overdue performance of its obligations that became due prior to the introduction of financial rehabilitation. Instead, interest is calculated according to the refinancing rate of the Central Bank of the Russian Federation.

Financial rehabilitation must not continue for more than two years.

 

 

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