In February 2024, the Supreme Court issued a Ruling on the case of Westwalk Projects Ltd. (No. А40-248405/2022), a Cyprus company, which formed new approaches to feasibility of bankruptcy procedures in relation to foreign corporations holding assets in Russia.

The Supreme Court explained: if the entity’s centre of main interests is located in a foreign jurisdiction, creditors have the right to distrain the entity’s Russian assets by initiating the so-called ‘secondary proceedings’ in the bankruptcy case in respect of the foreign debtor’s property.

This procedure does not entail legal consequences for the entity’s foreign management centre, while allowing creditors to enforce their claims at the expense of the Russian assets of the foreign counterparty.

VERBA LEGAL Bankruptcy Practice has prepared an Analytical Opinion on the development of judicial practice in cases of cross-border bankruptcy (bankruptcy of foreign legal entities).