Chain reaction

In 2020 compared to 2019, there was a noticeable increase in bankruptcy proceedings, regardless of the effect of the relevant moratorium. Due to its termination, an avalanche-like growth of bankruptcy proceedings is expected in the coming year. Despite the moratorium limiting filings by creditors against companies affected by the pandemic, these organizations could waive the guarantees of the moratorium and file for bankruptcy on their own in order not to further increase their accounts payable. Proceedings would proceed against both debtors and a certain number of creditors who planned to repay their debts immediately after the moratorium ended.

For Russian economy mass bankruptcies, which may take place at the beginning of 2021, are dangerous for several reasons. A chain reaction can cause bankruptcy of one organization. When a company for some reason ceases to fulfill its financial obligations, problems may arise for its creditors: suppliers, banks, investors (if the company is large) and employees. If we see a large number of companies going bankrupt, it will undoubtedly cause guaranteed difficulties not only for supplier companies, but also for the banking system as a whole.


You can view the full article in Rossiyskaya Gazeta.