Tishchenko Nataliya Arbitration Manager, Managing Partner of Nobili Law Firm
Interview with Natalia Tishchenko for the Yuridichna Gazeta
“Natalya, what can you recommend to do business in the current circumstances so as not to go bankrupt?”
Going bankrupt does not always mean losing everything. Bankruptcy is simply a tool that is used in developed countries to achieve such business goals:
invalidating disadvantageous contracts;
safeguarding collateral of a bankrupt debtor;
protecting against potential loss of control over a business;
preserving collateral and business assets;
increase in working capital;
reduction of financial burden on the business;
redistribution of financial flows of the business;
termination of the accumulation of debt obligations;
management of financial and business risks.
I posed the question differently. What to do to survive the economic crisis as painlessly as possible? First of all, it is worth noting that the crisis has not yet begun. We will begin to feel it with the beginning of autumn. However, now it is necessary to prepare, despite the restrictive measures in the country in connection with the pandemic. Now most businesses do not make a profit, cannot plan their further actions for more than a day. However, this is the best time to rethink your approaches, reorient yourself to new products, highlight the best employees and form reliable teams. Nobili has survived two economic crises. Having a specific practice, we saw many strategic mistakes that led to the elimination of quite experienced market players. Therefore, my recommendations are based on personal visibility. It’s nice to understand that no such employee is worried about the business and sees the whole picture as the owner sees it. Therefore, now he needs to get the most out of business control. It is up to you to review strategic contracts, negotiate and change the conditions, which may significantly affect the calculations in the future. View and change plans daily. It’s not yet time for ambitious ways. For any contentious issue, negotiation skills should be included as much as possible. Settling these issues in court is costly and not always effective for both parties. It’s nice to remove excess profits even for those who are currently at peak sales times. Consumers remember everything. On the contrary, it is during the crisis that more loyal conditions should be provided on which the consumer will switch from only a closed business to what works. It is necessary to provide installment payments, increase receivables. Remember that you need to sell to someone and from whom to buy. In general, be as honest and open as possible. The crisis will pass, but the reputation will remain!
– What actions, in your opinion, will definitely be wrong? What is not worth doing?
Of course, you should not hide from problems, try to deceive creditors, go to conflicts and neglect the legislation.
What tools does the Bankruptcy Codex procedure provide businesses with to restore solvency? How to use them wisely?
– First of all, the Code provides such a tool as pre-trial reorganization. To initiate her debtor, without waiting until the creditors begin to step on their heels. He independently develops a reorganization plan, approves it with creditors and submits to the court only for approval. Thus, all available instruments provided for by the rehabilitation are saved in the judicial procedure. This is a moratorium, restructuring of assets, installment and deferral of monetary obligations, writing off debts, obtaining additional financing, loans and borrowings, selling assets, etc. Bankruptcy proceedings begin by disposing of property, the effect of which coincides with the term of the moratorium, which is 170 days. In practice, this period can be much longer, depending on the size of the debtor’s enterprise, the availability of contentious issues, the coordination of actions of creditors, the workload of judges and the qualifications of the arbitration manager. The purpose of this procedure is to establish facts to solve the real state of the enterprise. Based on the results of the financial analysis of the arbitration manager and other actions established by the Code, creditors make a decision to switch to other procedures – reorganization or liquidation. Even staying for some time in the property management procedure allows the debtor to make all payments and pay all debts. In this case, the procedure is closed, and the company continues to work. Time spent under the moratorium is important and can reduce the burden on the business. Even the liquidation of an enterprise is sometimes beneficial to the business. Imagine you have an asset. You must protect it, invest in conservation, but you cannot sell it for some reason. In the liquidation procedure, prohibitions and arrests are lifted, property is sold. Lenders receive repayment of their monetary claims, and you begin to build a new business.
– A moratorium on repayment of creditors’ claims – what is it and how to work with it?
– A moratorium is a tool thanks to which the debtor is exempted from paying debt obligations for the duration of his action, penalties are no longer being charged, and any decision to collect debts is suspended. Often this is a period of silence that allows debt owners to find the right way out of this situation.
– What tools are there for individuals? For example, if a person has several loans, but suddenly he does not have the means to pay them? Is it possible to somehow put these obligations “on the stop?”
– Definitely, the first thing a person needs to do is go and agree with the bank. Banks in most cases try to meet bona fide borrowers by offering restructuring, credit holidays, and other debt repayment algorithms. If it is not possible to agree with the bank, then you need to understand that there are sufficient grounds for going to court with a statement on the opening of insolvency proceedings and calculating the mathematics of cost-effectiveness. It is possible to put obligations “on the stop” after the introduction of a moratorium, which begins to act after the opening of the case.
– Given the certain regulation of the KSPB in matters of bankruptcy of individuals, is it realistic for a person to go this way without a lawyer for whom she has no funds?
– The bankruptcy procedure for individuals is new and unknown, even for arbitration managers. We make an assumption, given the experience gained in the bankruptcy of legal entities. Of course, it is difficult for a simple person to navigate in what professionals are still not completely oriented. However, I think that when there is more practice, then standard approaches will appear. Soon, a simple person will be able to easily go through this process. In addition, the task of arbitration managers – from the beginning to gain the trust of people in bankruptcy proceedings. This is important for a holistic perception of the procedure, simplifying its implementation and achieving maximum results.
– According to the experience of previous crises, how can lawyers really help business? What is the role of a lawyer in bankruptcy proceedings?
– For successful cooperation between a lawyer and a client, trust must exist. A lawyer is the key person trusted by the head or business owner. It depends on the attorney’s mood, his desire and motivation to deal with the possibilities of such a tool as bankruptcy, the intention to cooperate with the arbitration manager and other participants in the case, the result will meet the expectations of the business owner. In a crisis, lawyers will be in demand, will maximize the use of negotiation skills to reduce the costs of their clients in litigation, which are professionals in the narrow fields of law for a qualitative preliminary analysis of future cases.
– How can you balance the interests of debtors and creditors in a crisis so that everyone stays afloat?
– Balance can be achieved only if each side understands the interests of the other and in the case of concerted actions towards each other. Any contentious issues that go beyond negotiation will require additional resources for both the lender and the debtor.
– In what situations is bankruptcy and liquidation a way out? Is it possible to build a new business after this?
– Liquidation is also a tool that is used in business when there is a need to free up and get rid of illiquid assets, paying off your creditors as much as possible. Liquidation in bankruptcy is the only legal instrument to exit the enterprise’s market for debt obligations. First of all, it allows you to maintain the reputation of the owner. Most of the owners who went through the bankruptcy of their enterprises, successfully open a new business, using past experience.
– Share a secret, how not to succumb to panic, think sensibly and not make unnecessary mistakes? How do you overcome stress?
– In any stressful situation, I turn upside down. I am not kidding! This is my way to turn my head on in stressful situations. It is important to stop and think. There is always a way out. However, the opportunity to find him appears only in a calm state. If a person does not have his own tasks, she will go the wrong way, getting involved in the execution of other people’s plans, be exposed to other people’s emotions. For those who know where they are going, panic does not work.
Link to the original source: https://yur-gazeta.com/interview/kriza-mine-a-reputaciya-zalishitsya.html