Russian Insolvency for Foreign Creditors:
Creditor-Side Counsel Who Knows the Terrain

Pravo-300 · 8 years |

Best Lawyers Russia |

Kommersant |

1,000+ matters |

15+ years

Practice
Est. 2009 · Practice No. 02

About This Practice

Foreign creditors in Russian insolvency proceedings face a structural disadvantage that has nothing to do with legal bias. The Russian insolvency framework — governed by Federal Law No. 127-FZ of 26 October 2002 — is procedurally demanding, time-compressed, and heavily weighted towards creditors who understand its mechanisms and act within its timelines. A creditor who files late, who challenges transactions without the evidentiary groundwork, or who misreads the priority rules will obtain less than a creditor with equal legal rights who understands what the statute actually requires and when. At Vetrov & Partners, our restructuring and insolvency practice is built around creditor-side representation for foreign clients: trade creditors, financial creditors, funds with distressed Russian positions, and international companies whose Russian subsidiaries or counterparties have entered insolvency proceedings. We do not represent debtors. Our practice is exclusively on the creditor side of the table.

Who We Act For

The clients who instruct us on restructuring and insolvency matters.

Our instructions come from foreign creditors, overseas investors, and international companies whose Russian counterparties or subsidiaries are in financial distress or formal insolvency proceedings.

Client situations we act for:

You are a trade creditor — a European or Asian manufacturer or distributor — whose Russian customer has entered insolvency proceedings. You have a significant outstanding receivable. You need to understand whether filing a creditor claim is realistic, what the recovery timeline looks like, and whether any pre-insolvency transactions are challengeable.

You are a fund manager with a distressed position in Russian debt. Your Russian borrower is in or approaching insolvency. You need specialist Russian insolvency counsel to manage the claim, monitor the proceedings, and advise on recovery strategy — including whether subsidiary liability proceedings against the controlling shareholder are viable.

You are General Counsel of an international group whose Russian subsidiary is insolvent. The subsidiary's insolvency affects a broader corporate restructuring. You need advice on the interaction between the Russian proceedings and the group's wider restructuring — and on the personal exposure of directors who are nationals of other jurisdictions.

You are a foreign bank or financial institution with a secured or unsecured claim against a Russian borrower in insolvency. You need to understand the Russian priority rules, the treatment of your security, and the implications of cross-border insolvency coordination for your recovery.

You are a foreign investor who has funded a Russian company that is now in financial difficulty. Pre-insolvency restructuring — including debt-for-equity conversions and pre-pack arrangements — may be available, and you need to understand the options before formal proceedings begin.

You are an international law firm acting for a creditor in cross-border insolvency proceedings with a Russian element. You need Russian insolvency counsel who can manage the Russian proceedings independently while coordinating with your wider strategy.

What We Do

Our practice covers the full creditor-side lifecycle of Russian insolvency proceedings, from the pre-insolvency assessment of a counterparty's financial position through to enforcement and — where applicable — subsidiary liability proceedings against those responsible for the insolvency. We act exclusively on the creditor side. We do not represent debtors, insolvency administrators, or companies seeking protection from their creditors.

In Russian insolvency proceedings, a creditor must file its claim within two months of the publication of the insolvency notification in order to participate in the first creditors' meeting and be included in the creditor register (Article 71, Federal Insolvency Law). Creditors who file after this deadline are included in the register but lose voting rights for key procedural decisions made at the first meeting — including the selection of the insolvency administrator and the approval of the sale of the debtor's assets. We manage the claim filing process from the moment of instruction, ensuring that deadlines are met and that the claim is presented in the form required by Russian procedural law.

Creditor claim filing and register inclusion

Russian insolvency law grants the insolvency administrator — and, in certain circumstances, individual creditors — the right to challenge transactions entered into by the debtor before insolvency that are detrimental to creditors. Article 61.2 covers transactions at undervalue within one and three years before the insolvency filing. Article 61.3 covers preferential payments within one and six months before filing. We analyse the debtor's pre-insolvency transactions as a matter of routine on every creditor instruction, identify the most promising challenges, and file challenge applications on behalf of our clients where the prospects justify it.

Transaction challenges under Articles 61.2 and 61.3

Under Article 61.11 of the Federal Insolvency Law, individuals who controlled the debtor and whose actions caused or contributed to the insolvency may be held personally liable for the debtor's debts. This mechanism — known as subsidiarnaya otvetstvennost — is a powerful creditor remedy when the debtor itself is an empty shell with no assets, but the controlling persons have personal assets available. We advise on the prospects of subsidiary liability claims, identify the relevant controlling persons, and manage the proceedings through to enforcement against personal assets where successful.

Subsidiary liability of controlling persons

In insolvency proceedings with multiple creditors, the voting dynamics at creditors' meetings can significantly affect recovery outcomes. We monitor all material procedural steps, attend creditors' meetings on behalf of foreign clients, and advise on voting strategy — including whether to support or oppose the selection of a particular insolvency administrator, the approval of a restructuring plan, or the proposed sale of the debtor's assets.

Monitoring proceedings and voting strategy

Where our client is represented by overseas legal teams in parallel proceedings — for example, in recognition or enforcement proceedings in a foreign jurisdiction, or in cross-border restructuring negotiations — we manage the Russian insolvency track as part of a coordinated strategy. We advise on the interaction between Russian insolvency law and the law of the jurisdiction where the client or the debtor's other assets are located, and we work within a structure where the client's international advisers direct overall strategy.

Cross-border insolvency coordination

For foreign creditors who identify that a Russian counterparty is in financial difficulty before formal insolvency proceedings begin, a range of pre-insolvency options may be available — including negotiated debt restructuring, security enforcement, or the commencement of creditor-initiated insolvency proceedings. We advise on the available tools and the circumstances in which each is appropriate.

Pre-insolvency restructuring advice

The boundary between a commercial dispute and an insolvency matter is frequently crossed in the same engagement. A trade creditor pursuing a contractual claim against a Russian counterparty may find that insolvency proceedings are filed during the litigation; conversely, a creditor in insolvency proceedings may need to pursue a commercial claim against a third party that received assets from the debtor before filing. We manage both tracks within the same engagement where instructed to do so.

Insolvency-adjacent commercial claims

By the Numbers

Representative Matters

Selected instructions in Restructuring & Insolvency for Foreign Creditors

The matters described below are anonymised to preserve client confidentiality. Specific details are available to prospective clients during initial consultation, subject to conflict checks.

HEADLINE: Acted for European industrial supplier in Russian insolvency proceedings — full claim recognised, two pre-insolvency transactions successfully challenged under Article 61.2.

BACKGROUND: A European industrial component supplier held a substantial unpaid receivable against its former Russian distributor following the cessation of trading activity. The distributor filed for insolvency under Russian law. In the period before the insolvency filing, the distributor had transferred significant assets to affiliated entities.

OUR ROLE: We filed the creditor's claim within the statutory two-month deadline, securing full inclusion in the creditor register and voting rights at the first creditors' meeting. We conducted a review of the debtor's pre-insolvency transactions and identified two transfers — one at undervalue under Article 61.2 and one preferential payment under Article 61.3 — that met the statutory grounds for challenge. We filed challenge applications in both cases.

OUTCOME: Both challenges were upheld at first instance. The assets returned to the insolvency estate materially improved the recovery prospects for the creditor tier in which our client ranked. Proceedings are ongoing.

EU trade creditor · insolvency proceedings · claim recognised · transaction challenge

Creditor Claim  ·  Art. 61.2 Challenge  ·  Art. 61.3 Challenge   ·  Europe → Russia

HEADLINE: Defended company director in Russian cassation — insolvency-related personal liability claim of approximately $200K dismissed.

BACKGROUND: A company director faced a subsidiary liability claim in Russian insolvency proceedings under Article 61.11 of the Federal Insolvency Law. Creditors alleged that his management decisions had caused or materially contributed to the company's insolvency. The first-instance and appellate courts had found against the director on causation; the matter reached cassation review before the circuit court.

OUR ROLE: We prepared and presented the cassation appeal, challenging the lower courts' findings on the causal link between the director's specific decisions and the onset of insolvency. We produced an expert analysis of the pre-insolvency trading period and submitted that the insolvency was attributable to market conditions rather than the director's conduct as defined by the statutory standard under Article 61.11.

OUTCOME: The cassation court found in the director's favour on the principal causation question. The personal liability claim — valued at approximately $200K — was dismissed. The matter was not remitted for reconsideration.

Subsidiary Liability Defence

Subsidiary Liability Defence  ·  Art. 61.11   ·  Insolvency Cassation   ·  Director Protection

HEADLINE: Advised foreign financial institution on treatment of security in Russian insolvency proceedings — secured creditor status preserved, priority position confirmed.

BACKGROUND: A foreign financial institution held security over Russian-situated assets of its borrower, which entered insolvency proceedings. The insolvency administrator contested the validity and perfection of the security, seeking to treat the institution as an unsecured creditor.

OUR ROLE: We represented the institution at the creditors' meeting and in the proceedings before the insolvency court on the question of secured creditor status. We prepared the legal analysis of the security documentation under Russian law and appeared at the relevant hearings to rebut the administrator's arguments.

OUTCOME: The institution's secured creditor status was confirmed by the court. It received payment in priority ahead of the general unsecured creditor tier from the proceeds of the secured asset sale.

Foreign bank · secured creditor · enforcement of security in insolvency

Secured Creditor  ·  Security Enforcement  ·  Insolvency Court   ·  Financial Institution

HEADLINE: Advised international group on Russian subsidiary insolvency — director exposure assessment and personal liability mitigation strategy.

BACKGROUND: An international operating group's Russian subsidiary entered insolvency proceedings following a period of sustained operating losses. The group's officers at the subsidiary level included foreign nationals who had served as directors. The insolvency administrator indicated an intention to bring subsidiary liability claims against the former directors.

OUR ROLE: We assessed the personal liability exposure of the foreign directors under Article 61.11 and related provisions, analysed the historical management decisions cited by the administrator, and advised on a response strategy. We represented the directors in the subsidiary liability proceedings at first instance.

OUTCOME: The administrator's subsidiary liability claim against the foreign directors was dismissed at first instance. The decision is subject to appeal.

International company · Russian subsidiary insolvency · director liability

Director Liability  ·  Foreign Executives   ·  Subsidiary Liability Defence   ·  Russia

HEADLINE: Acted for Asian trade creditor in complex insolvency with multiple creditor tiers — voting strategy advisory and creditor meeting management.

BACKGROUND: An Asian manufacturer held a significant trade receivable against a Russian distributor that entered insolvency proceedings with multiple competing creditor tiers and a contested insolvency administrator. The insolvency proceedings were contentious, with significant disputes between the creditor tiers at successive creditors' meetings.

OUR ROLE: We filed the creditor's claim and managed its inclusion in the register. We advised on voting strategy across four creditors' meetings over a twelve-month period, including the vote on the selection of the insolvency administrator and the approval of the proposed asset sale. We also advised on a challenge to the administrator's independence, which was filed by a group of creditors represented collectively.

OUTCOME: The asset sale was approved on terms consistent with our client's interests. The administrator independence challenge was partially upheld, resulting in additional court supervision of the sale process.

Asian trade creditor · monitoring + creditor meeting strategy

Creditor Meeting Strategy  ·  Voting Advisory   · Asia → Russia   ·  Multiple Creditor Tiers

We advise on creditor strategy from the first sign of a counterparty's
financial difficulty — not only after the formal insolvency notice.

info@vetrovpartners.com
Response: under 2 hours (Mon–Fri 09:00–20:00, Sat 10:00–15:00 UTC+7)

The Partner

Stanislav Lastovsky leads Vetrov & Partners' restructuring and insolvency practice, acting for foreign creditors, international financial institutions, and overseas investors in Russian insolvency proceedings. He has managed creditor-side instructions from the initial claim filing stage through to subsidiary liability proceedings and asset recovery, across a range of industries and creditor types. His practice covers the full procedural spectrum of Russian insolvency law, from the monitoring of pre-insolvency financial distress through to the conclusion of liquidation proceedings.

His work includes transaction challenge proceedings under Articles 61.2 and 61.3 of the Federal Insolvency Law, subsidiary liability claims against controlling persons under Article 61.11, and advisory work on the interaction between Russian insolvency proceedings and restructuring processes in other jurisdictions. He advises regularly on the treatment of foreign security in Russian insolvency and on the rights of foreign creditors at creditors' meetings.

Authority by Association:
We act as Russian insolvency counsel in cross-border matters where the creditor is represented by overseas legal teams, handling the Russian insolvency proceedings independently while coordinating on overall recovery strategy.

Recognised by Pravo-300   ·  Listed in Best Lawyers Russia

The Team

Every matter in this practice is supervised by the practice lead partner and supported by a dedicated fee-earner from our team.

Recognition

We are a Russian-qualified law firm. Our recognition is from Russian legal directories. We do not hold rankings from Chambers Global or Legal 500 in this practice area.

How We Work

Our engagement process for restructuring and insolvency matters.

We close the matter with a written summary of the recovery achieved, the procedure followed, and any ongoing monitoring requirements. For matters that result in partial recovery, we explain why and what — if anything — was done to maximise the available outcome.

Step 5 · Matter close (commitment level: complete)

The practice lead partner manages every material step personally. We attend creditors' meetings on behalf of foreign clients and provide written reports after each one. For transaction challenge and subsidiary liability proceedings, we manage the court hearings independently and report in writing at each material stage.

Step 4 · Execution (commitment level: ongoing)

For matters we accept, we provide a written scope of work and fee estimate before billable work begins. Insolvency matters often have distinct phases — claim filing, transaction challenge, subsidiary liability — and we structure our engagement accordingly, providing phase-by-phase estimates where appropriate.

Step 3 · Written scope (commitment level: read a document)

If the initial exchange indicates a viable instruction, we schedule a thirty-minute call with the practice lead partner. We will tell you, during that call, what the realistic recovery range looks like given the insolvency proceedings' current stage and the structure of the creditor register. We will also tell you if the matter is better suited to a different approach.

Step 2 · Complimentary call (commitment level: thirty minutes)

In insolvency matters, the first conversation typically involves two things: an assessment of whether the matter is still within the filing deadline, and an assessment of whether any pre-insolvency assets are still reachable. Send us three paragraphs — the name of the Russian debtor, a brief description of your claim, and the date on which you became aware of the insolvency. We will respond within two hours with an honest assessment of where the deadline stands and whether early instruction changes the options.

For creditors who contact us before formal insolvency proceedings have begun, the first conversation is different: we assess the debtor's financial position, advise on available pre-insolvency tools, and set out the options for both creditor-initiated insolvency and negotiated restructuring.

Step 1 · Initial enquiry (commitment level: minimal)

Fees

How we structure our fees

Our standard model for insolvency matters is hourly billing at rates reflecting the seniority of the fee-earner and the matter's complexity, invoiced monthly in EUR or USD with fourteen-day payment terms.

For enforcement-focused creditor instructions — where the recovery value is quantifiable and the claim is liquid — we are willing to discuss success-fee components as part of the fee structure. This is available for appropriate matters where we assess the prospects to justify it, and it is discussed candidly during the initial call. Our cost base allows us to provide partner-led insolvency counsel at economics that reflect a regional, non-Moscow practice — without the overhead premium embedded in the rates of larger urban firms.

We do not publish rates. We provide a written fee estimate within twenty-four hours of receiving your enquiry.

Questions

Frequently asked questions about Restructuring & Insolvency for Foreign Creditors
The answers below are written for a reader with commercial legal experience. They are accurate as of the date of this page's last review.

Last reviewed: May 2026

Related Practices

Tax Controversy

Insolvency proceedings frequently surface unpaid Russian tax claims that rank ahead of trade creditors. Our tax controversy team advises on the scope and validity of tax claims filed in insolvency proceedings.

Corporate Governance for Foreign Shareholders

Foreign shareholders in Russian companies need governance protections that reduce the risk of precisely the events that create insolvency exposure. Our corporate governance practice advises on structural safeguards.

Asset Tracing & Recovery in Russia

When the debtor's assets have been moved — to affiliated entities or out of Russia entirely — asset tracing and enforcement outside the insolvency proceedings may be the most effective recovery route.

Cross-border Disputes & Arbitration

Commercial claims against a Russian counterparty that subsequently enters insolvency require coordinated litigation and insolvency strategy. Our disputes practice handles the commercial track in conjunction with the insolvency team.

Further Reading

The Two-Month Clock: Filing Creditor Claims in Russian Insolvency Proceedings

Practice Analysis

Analysis from our Restructuring & Insolvency team

Subsidiary Liability in Russian Insolvency: The Case for Early Action

Practice Analysis

Challenging Pre-Insolvency Transactions: Articles 61.2 and 61.3 in Practice

Practice Analysis

Make an Enquiry

ALTERNATIVE CONTACTS
Email: info@vetrovpartners.com
Phone (office): +7 (383) 310-38-76
Mobile / WhatsApp / Telegram: +7 (983) 510-38-76
Telegram channel: t.me/vitvetcom
Hours: Mon–Fri 09:00–20:00 · Sat 10:00–15:00 (UTC+7)
Response: Under 2 hours (business hours)

ADDRESS:
Deputatskaya Street 46, Office 1191, 19th Floor
Novosibirsk, Russia

Vetrov & Partners is a Russian-qualified law firm. For matters governed
by foreign law or requiring local admission in other jurisdictions,
we collaborate with trusted counsel in the relevant jurisdiction.

Vetrov & Partners · Boutique Law Firm · Established 2009 · Russia

The contents of this page are provided for informational purposes and
do not constitute legal advice. No solicitor–client relationship is
formed by reading this page. Vetrov & Partners is registered and
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