Bankruptcy filings by legal entities in the Russian Federation surged in the opening months of 2024, rising by nearly 60 percent when compared with the same period a year earlier. The figure reflects a sharper economic shift than in recent years, and it has drawn attention from financial analysts and industry observers alike. According to the source, 571 companies entered bankruptcy in January and 771 did so in February. By comparison, January and February 2023 saw 364 and 478 filings, respectively, underscoring a pronounced year-over-year increase for the first two months of 2024. The January rise sits around 57 percent, while February shows about a 61 percent jump. These numbers mark the first sustained uptick in corporate insolvencies since 2021, suggesting a shift in the operating environment for many Russian enterprises. The reporting note highlights that the effect of last year’s moratorium on insolvencies has diminished, and analysts anticipate higher bankruptcy activity if the current conditions persist. A proposed change to the debt threshold—up to 300 thousand rubles, with an ultimate cap that could reach two million rubles—has sparked debate among policymakers and practitioners about its potential impact on corporate distress and the speed of insolvency proceedings. This proposal remains contentious among authorities and the legal community, who weigh it against broader financial stability goals. [Source: Kommersant]
Developments in February also included a notable ruling by the Supreme Court of the Russian Federation, which allowed bankrupt foreign legal entities with close connections to Russia to be processed within the domestic system. This decision reflects ongoing adjustments in the treatment of cross-border corporate structures and their implications for liquidation procedures. In addition, prior statements from Russia’s Ministry of Finance indicated that even companies in a bankruptcy process would be liable for excess profits tax, highlighting the persistent fiscal expectations placed on entities undergoing insolvency. The period has also seen coverage of individual corporate failures, including reports that some executives formerly associated with large state-controlled concerns, such as Gazprom, have faced bankruptcy proceedings themselves, underscoring broader corporate stress within the sector. [Source: Kommersant]
Analysts stress that the combination of tightened credit conditions, sustained domestic demand pressures, and evolving regulatory thresholds can contribute to a higher frequency of formal insolvencies in the near term. While the moratorium’s effects appear to have waned, observers caution that policy changes and tax obligations will continue to shape corporate behavior. The current environment emphasizes the need for corporations to monitor liquidity, debt profiles, and regulatory developments closely, as even entities with previously strong profiles may encounter financial distress. The evolving landscape also invites scrutiny of the effectiveness of debt limit adjustments and their potential to spur or hinder timely restructurings, depending on how they are implemented and enforced. [Source: Kommersant]