Lawyer Pavel PetrovLawyer Pavel Petrov

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Financial Analysis of a Debtor in Russian Bankruptcy

In briefA financial analysis in Russian bankruptcy addresses whether the estate can cover case expenses, whether solvency can be restored and which procedure fits the debtor’s condition. The insolvency practitioner relies on accounting records, financial statements, contracts, asset data and liabilities. The analysis is not reduced to one ratio and does not by itself prove management fault or fraudulent bankruptcy.

Purpose

Assess assets, expenses, solvency and the prospect of restoring operations.

Evidence

Verifiable records and trends, not merely the debtor’s unsupported statements.

Outcome

Practitioner conclusions for the court and creditors, open to documented challenge.

Why the analysis is required

Article 70 of Federal Law No. 127-FZ links the analysis to two central questions: whether the debtor has enough property to cover bankruptcy expenses, including practitioner remuneration, and whether solvency can be restored. During supervision, the interim manager also uses it to explain which subsequent procedure is appropriate.

It differs from an audit or ordinary business valuation. It does not unconditionally certify financial statements, value every asset or replace judicial examination of a disputed transaction.

Records examined

GroupExamplesReview
Financial statementsBalance sheet, income statement and tax returnsTrends in assets, liabilities, revenue and losses
PropertyInventory, registers and security recordsExistence, liquidity, encumbrances and sale prospects
LiabilitiesContracts, claims register and judgmentsAmount, maturity, priority and security
Cash flowsBank statements, cash records and receivablesActual receipts, expenses and collectability
OperationsContracts, staff, licences and production dataAbility to continue and break even
Missing records do not turn an assumption into a proven fact. The practitioner should identify gaps, request information and explain how limited evidence affects each conclusion.

Main ratios

Government Resolution No. 367 provides solvency, financial-stability and business-activity indicators, including absolute and current liquidity, asset coverage, autonomy, profitability and turnover ratios.

The trend, reason for a change and comparability of the source data matter as much as the final figure. A formal set of ratios without an asset, market, liability and break-even review does not explain the debtor’s actual condition.

Assets and liabilities

Asset review covers ownership, condition, restrictions, liquidity and expected sale costs. Receivables are tested against maturity, supporting records, disputes and the counterparty’s ability to pay. Liabilities are reconciled with accounts, creditor applications and the claims register.

Transactions and changes in the asset structure require separate review. Possible avoidance of a debtor transaction is a distinct legal question.

Who performs it and when

The interim manager has the express duty during supervision. In an individual bankruptcy, Article 213.9 also requires the financial manager to analyse the individual’s financial condition. Scope and depth depend on the debtor, procedure and available evidence.

The result is provided to case participants and informs the next step. For a company it is connected with supervision, rehabilitation, external administration or liquidation proceedings. Data and expert costs are assessed under the rules on corporate bankruptcy expenses.

Quality checklist

  1. Confirm the period and source-record list.
  2. Identify missing or conflicting data.
  3. Recalculate key indicators.
  4. Compare recorded assets with registers and inventory.
  5. Test receivable collectability.
  6. Examine the reasons for deterioration.
  7. Connect conclusions to the recommended procedure.
  8. Submit documented objections where necessary.

Questions

Is the analysis an audit?

No. An audit addresses financial-statement assurance; the practitioner analysis serves statutory bankruptcy purposes.

Do weak ratios prove deliberate bankruptcy?

No. Causes, transactions, controlling-person conduct and statutory indicators require separate evidence.

Can participants dispute the analysis?

They may submit calculations, records and objections. The court assesses the evidence as a whole.

Is an individual debtor analysed?

Yes. Article 213.9 includes financial-condition analysis among the financial manager’s duties.

Official sources

Need to review the analysis?

We can compare the practitioner’s conclusions with the records, calculations and statutory purpose without promising a predetermined outcome.

Initial consultation