ABSTRACT
Insolvency (bankruptcy) is defined as a debtor's inability recognized through arbitration to fully extinguish its creditors' claims in relation to its monetary obligations, payments of dismissal compensations, and/or payments of wages and salaries to persons it currently employs or previously employed under labor contracts and/or to fulfill its obligation to make any mandatory payments. The Russian Civil Code establishes a basis to carry out bankruptcy proceedings, and the Bankruptcy Law regulates such aspects of bankruptcy as bankruptcy signs, bankruptcy proceedings, anti-bankruptcy measures, etc. The procedure of declaring bankruptcy could include different steps, such as supervision, financial recovery, receivership, and bankruptcy liquidation proceedings. The procedure could be terminated by entering into an amicable agreement. If a legal entity is recognized as bankrupt, it will terminate its activities. In the framework of different bankruptcy procedures, certain restrictions are imposed upon the debtor. This results from the necessity to achieve the purposes of the institution of bankruptcy, which are predefined by the bankruptcy step that the debtor currently is in. They concern the procedure of managerial decision making and settlement of deals. The debtor's legal entity management structure changes significantly due to the appointment of a trustee. Bankruptcy legislation provides for a possibility to contest deals of the debtor or other persons.
