Legal status of an insolvency practitioner

Statement of the question

The key figure in bankruptcy is the insolvency practitioner approved by the court.

The issue of the legal status of the insolvency practitioner has always been controversial, both in the pre-revolutionary period and in the post-Soviet period.

There are different approaches to determining the essence of an insolvency practitioner.

The theory of representation is very common. Some scholars consider the insolvency practitioner to be a representative of creditors⁠ , others - the debtor⁠ , others believe that the insolvency practitioner represents the interests of not only creditors and the debtor, but also the owner of the property, the founders of the debtor, civil circulation and their own⁠ , the fourth consider the insolvency practitioner to be the body of the debtor⁠ .

There is also a point of view according to which in different procedures the manager represents the interests of different persons: in external administration - the debtor, in bankruptcy proceedings - creditors, in a settlement agreement - the state⁠ .

Other authors believe that the insolvency practitioner combines elements of the debtor’s body, the debtor’s representative, the trustee of the property, and also has special powers not inherent in other legal entities⁠ .

Other theories are also presented in science: trust management⁠ ; an employee who has entered into an employment contract⁠ ; property theory (manager's rights – limited property rights)⁠ ; public theory.

Within the framework of public theory, the insolvency practitioner is defined as an enforcement agency (arbitration bailiff)⁠ , official – (court manager)⁠ .

Some authors, in turn, deny that the insolvency practitioner has public functions, recognizing him as an exclusively private legal entity⁠ .

There are also very exotic points of view, for example, that the relationship between the debtor and the insolvency administrator should be formalized by a contract⁠ .

As we can see, there are a large number of different theories that explain the nature of the insolvency practitioner; often these theories are mutually exclusive. Currently, there is no generally accepted point of view on this issue.

The wide variety of theories about the essence of an insolvency practitioner is explained by the fact that both bankruptcy itself and the activities of an insolvency practitioner are multifaceted and multifaceted, associated with a large number of legal relations and their participants.

In bankruptcy, civil, tax, labor, administrative, criminal and other relations are closely intertwined.

Accordingly, if we consider the activities of an insolvency practitioner from different aspects, then any of the above theories are applicable in principle:

• for example, when refusing transactions (Art. 102 Bankruptcy Law), when concluding transactions, when selling the debtor’s property, the insolvency practitioner acts as a body (representative) of the debtor, in connection with which the theory of representation or body is applicable (depending on which theory of the director: as a body or representative we adhere to);

• upon termination of enforcement proceedings in bankruptcy proceedings and the transfer of all writs of execution from the bailiff to the insolvency practitioner, the theory of the insolvency practitioner as an arbitration bailiff (enforcement body) has grounds, since the register of creditors' claims is essentially a quasi-consolidated enforcement proceeding;

• when dismissing employees in bankruptcy proceedings, the insolvency practitioner acts as an employer, which explains the origins of the theory of labor relations as the basis for the status of the insolvency practitioner;

• when bringing an insolvency practitioner to criminal liability, he is recognized by judicial practice as an official (Art. 201 of the Criminal Code of the Russian Federation), in connection with which it is appropriate to talk about his having the status of an official;

However, the essence of the legal status of the manager cannot be defined as the mechanical sum of all his hypostases in the numerous legal relations in which he participates. To determine the legal status of an insolvency practitioner, it is necessary to determine its essential, inalienable features, which are always inherent in the manager, regardless of the capacity in which he acts in one relationship or another.

In our opinion, of the pre-revolutionary scientists, S.I. most accurately described the legal nature and essence of the activities of the insolvency practitioner. Galperin in the monograph “Rights and obligations of a sworn trustee in a case of commercial insolvency”⁠ :

“... the nature of cases of commercial insolvency provides a guide to an unmistakable determination of the importance of a sworn trustee as a body of the bankruptcy process.

His activities are imbued with a public character and he is an official who is not interested in either the individual property benefits of the creditors or the individual benefits of the debtor himself, while at the same time taking care to respect the benefits of both.

A sworn trustee is a representative of the state interest delegated by the court in the case of each given insolvency and, to the same extent as a judicial investigator in criminal cases, is an ad hoc investigator, taking care of the disclosure with complete clarity before the eyes of the judicial place that has delegated him of the entire position of the insolvent debtor in his cash, debt and alienated property, in his debts, taking care at the same time about the timely disclosure of all material, which can serve to establish the causes of insolvency.

Moreover, the law instructs the sworn trustee...to be the master of the estate...and...to take care of the protected property as a good owner should...

The legislator, bearing in mind the obvious public interest of bankruptcy proceedings, made sure that from the very beginning there was a representative of this interest in the case and considered it convenient to vest special power for this sworn trustee. By virtue of this, a sworn trustee is an official, a person who is given the right to conduct interrogations, seek the assistance of the police, convene cash lenders, preside over their meetings, and even convene creditors in his apartment.”

Historical approaches

G.F. Shershenevich also recognized the activity of a sworn trustee as public: “By the name of the enforcement process we understand the application of the force that state power has to change the actual state of things in favor of what was recognized in court as right and in accordance with the court decision... the insolvency practitioner must change the actual state of things in favor of recognized creditors in accordance with the purpose specified by law, that is, he owes the value of things and claims that constitute the property of the debtor and are in his household, at his disposal and management, pay for proportional satisfaction of creditors"⁠ .

Among contemporaries, the point of view of E.V. seems to be the most justified, logical and closest to the content of the activities of the insolvency practitioner. Bogdanov (op. cit.), according to which:

• the activities of a judicial manager tend to be judicial-administrative activities;

• a insolvency practitioner is a person appointed by the court on behalf of the state and controlled by the state through the court;

• the judicial manager is vested with the function of supervision over the activities of the debtor and its management bodies;

• The terms “rights” and “obligations” cannot be used in relation to a judicial manager. It is necessary to talk about the powers of the judicial manager, about his competence. Therefore in clause 5 art. 20.3 The Bankruptcy Law states that the powers of the insolvency practitioner cannot be transferred to other persons;

• A judicial manager is not only not an individual entrepreneur, but by his legal status cannot be a private practitioner. The fact that candidates for judicial managers are proposed to the court by self-regulatory organizations of judicial managers does not have qualifying significance in this case because these candidacies, naturally, are not mandatory for the court (this is some kind of auxiliary activity), and also because the candidacy of a judicial manager can be proposed by the applicant or a meeting of creditors (Art. 12, 37, 39, 41, 73 Bankruptcy Law). A judicial manager is in fact a person appointed by the court on behalf of the state and controlled by the state through the court and therefore, in his legal status, he should be equated to an official.

Analysis of modern legislation and judicial practice

IN Resolution dated March 5, 2019 No. 14-P, the Constitutional Court of the Russian Federation indicated that the institution of bankruptcy acts as a market mechanism for the recovery of the Russian economy.

Despite the fact that the Federal Law “On Insolvency (Bankruptcy)” (hereinafter referred to as the Bankruptcy Law) was adopted in 2002, the problem of the legal status of the insolvency practitioner remains unresolved to this day.

Article 20, paragraph 1 The Bankruptcy Law defines the legal status of the insolvency practitioner through his membership in the SRO: “An insolvency practitioner is recognized as a citizen of the Russian Federation who is a member of one of the self-regulatory organizations of insolvency practitioners.”

Obviously, such a formulation is not only unsuccessful, but also erroneous, since, in accordance with paragraph 2 of article 20.2 According to the Bankruptcy Law, not all members of the SRO have the right to carry out the activities of an insolvency practitioner, just as exclusion from the SRO does not automatically lead to the termination of activities, since the insolvency practitioner is confirmed in office and released from it only by the arbitration court.

Next, paragraph 2 of article 20 The Bankruptcy Law determines that an insolvency practitioner is a subject of professional activity and carries out such professional activity while engaging in private practice.

This element of the legal status is correct, but it does not answer the question about the essence of the legal status of the insolvency practitioner, since professional activities are also carried out by lawyers, notaries, detectives, patent attorneys, civil servants, doctors, teachers, etc.

Indication in Law on bankruptcy that the insolvency practitioner is engaged in private practice does not disclose the essence of the legal status of the insolvency practitioner, since such a definition reveals only the tax consequences of such status (see, for example, subparagraph 2 of paragraph 1 of Art. 227 Tax Code of the Russian Federation).

Until January 1, 2011, the activity of the insolvency practitioner was entrepreneurial, despite the fact that back in 2005 the Constitutional Court in paragraph 5 Regulations dated December 19, 2005 No. 12-P expressed the following position:

“The Federal Law “On Insolvency (Bankruptcy)” lists as a mandatory requirement for the insolvency practitioner the need to register him as an individual entrepreneur (paragraph two of paragraph 1 of Article 20), which, taking into account Article 2 The Civil Code of the Russian Federation on entrepreneurial activity as an independent activity carried out at one’s own risk, aimed at systematically obtaining profit from the use of property, sale of goods, performance of work or provision of services, is not combined with the real nature of the activity of the insolvency practitioner as a person performing primarily public functions.”

From January 1, 2011, the activities of the insolvency practitioner ceased to be considered entrepreneurial (edition Law on bankruptcy dated December 3, 2008), which should have finally brought the regulation into line with the real nature of his activities as an official vested with public powers in accordance with Resolution of the Constitutional Court of the Russian Federation No. 12-P dated December 19, 2005.

From Law on bankruptcy, the provision that the activity of the insolvency practitioner is entrepreneurial disappeared, but the ban itself was not established, since para. 3 clause 1 article 20 The Bankruptcy Law still contains instructions that the insolvency practitioner has the right to engage in entrepreneurial activities.

In this connection, later the Supreme Arbitration Court of the Russian Federation expressed several positions in which it again consolidated the entrepreneurial status of the insolvency practitioner:

• Clause 5 of the Plenum Resolution No. 97 dated December 25, 2013 states that the legal nature of the insolvency practitioner’s remuneration corresponds to the remuneration under the contract (article 723 Civil Code),

• The Resolution of the Presidium dated March 4, 2014 No. 17283/13 states that the remuneration of the insolvency practitioner is taxed as business income.

Thus, despite the position of the Constitutional Court of the Russian Federation and the changes made to Law on bankruptcy, the Supreme Arbitration Court of the Russian Federation continued to consider the activities of the insolvency practitioner as entrepreneurial.

Federal constitutional law dated 06/04/2014 No. 8-FKZ “On Amendments to the Federal Constitutional Law “On Arbitration Courts in the Russian Federation” and Article 2 of the Federal Constitutional Law “On the Supreme Court of the Russian Federation” The Supreme Arbitration Court was abolished, but the explanations of its Plenum continue to be valid (part 1 of Article 3 of this Federal Constitutional Law).

Therefore, at present, arbitration courts are obliged to apply the explanations of the Plenum of the Supreme Arbitration Court, expressed in regulations dated July 23, 2009 No. 60 and dated December 25, 2013 No. 97, according to which the activities of the insolvency practitioner are considered entrepreneurial.

Approaches to legal status

Later, in paragraph 13 of the Review of the practice of courts considering cases related to the use of chapter 23 The Tax Code of the Russian Federation, approved by the Presidium of the Supreme Court of the Russian Federation on October 21, 2015, clearly stated that the activities of insolvency practitioners are not entrepreneurial: “... from 01.01.2011, the professional activities of insolvency practitioners and entrepreneurial activities were differentiated, and it was established that the activities of insolvency practitioners regulated by bankruptcy legislation are not entrepreneurial activities.”

Thus, at present there are fundamental contradictions between the judicial practice of arbitration courts, on the one hand, and the Constitutional Court, by law on bankruptcy and the judicial practice of the Presidium of the Supreme Court - on the other, which must be resolved at the legislative level.

An attempt to determine the legal status of the insolvency practitioner

Public function of the manager

The legal status of the insolvency practitioner must be considered through his goals, objectives and functions, since they determine the main content of his activities.

For example, the Law “On Advocacy and the Bar in the Russian Federation” defines a lawyer as an independent professional adviser on legal issues.

Unfortunately, Law about bankruptcy gives in paragraph 1 of Art. 20 determination of the insolvency practitioner through his membership in the SRO, as mentioned above.

According to paragraph 4 of article 20.3 According to the Bankruptcy Law, when carrying out procedures applied in a bankruptcy case, the insolvency practitioner is obliged to act in good faith and reasonably in the interests of the debtor, creditors and society.

However, the interests of the debtor, creditors and society often (if not always) contradict each other, therefore, the insolvency practitioner, while acting in the interests of one of them, simultaneously acts against the interests of other persons.

Obviously, this formulation Law about bankruptcy is frankly unsuccessful.

In our opinion, the Constitutional Court of the Russian Federation spoke most accurately regarding the goals, objectives and functions of the insolvency practitioner in Resolution dated December 19, 2005 No. 12-P,

• “Bankruptcy procedures are of a public law nature, they involve coercion of a minority of creditors by a majority, and therefore, due to the impossibility of developing a common opinion in any other way, the will of the parties is formed according to other principles, different from the claim proceedings. Due to the various, often diametrically opposed interests of the persons participating in a bankruptcy case, the legislator must guarantee a balance of their rights and legitimate interests, which, in fact, is the public legal purpose of the institution of bankruptcy.” Thus, the insolvency practitioner does not act in the interests of the debtor, creditors and society, but ensures a balance of their interests (which means the possibility of the manager acting against the interests of the debtor, creditors, and society at the same time), exercising a certain discretion;

• “The insolvency practitioner is confirmed in office by the arbitration court”; when performing the state function of administering justice, the arbitration court, when considering bankruptcy cases, is obliged to attract and approve in the name of the Russian Federation an insolvency practitioner, otherwise the case is subject to termination; therefore, the insolvency practitioner helps the court administer justice in insolvency (bankruptcy) cases. The approval of the insolvency practitioner by the court is an additional element of the system of checks and balances, ensuring a balance of interests of all persons participating in the bankruptcy case, which also gives the status of the insolvency practitioner a public character;

• “entrepreneurial activity as an independent activity carried out at one’s own risk, aimed at systematically obtaining profit from the use of property, sale of goods, performance of work or provision of services, is not combined with the real nature of the activity of the insolvency practitioner as a person performing primarily public functions”; It is necessary to establish a legislative ban on insolvency practitioners from engaging in entrepreneurial activities, similar to lawyers and notaries. Law on bankruptcy in paragraph 1 of Article 20 indicates that the insolvency practitioner may engage in entrepreneurial activity provided that it does not affect the proper performance of the duties established by the Federal Law. This provision appears erroneous, since combining the professional activity of an insolvency practitioner as a public official with entrepreneurial activity is incompatible (A. V. Yukhnin wrote about this as early as 2005)⁠ ;

• “the decisions of the insolvency practitioner are binding and entail legal consequences for a wide range of persons,” which entails the need to establish an appropriate public status and guarantees of remuneration and independence.

Thus, an insolvency practitioner can be defined as an official vested with powers that are largely of a public law nature, confirmed in office by an arbitration court in the name of the Russian Federation to assist the court in considering a bankruptcy case and ensuring a balance of interests of persons participating in the case, the decisions of which are binding.

What legislation should regulate the activities of an insolvency practitioner?

In accordance with paragraph 5 resolutions Constitutional Court No. 12-P of December 19, 2005, the federal legislator must proceed from the need to ensure consistent regulation of relations in the field of professional activity of an insolvency practitioner of public importance.

Therefore, it is necessary to establish at the legislative level what legislation regulates relations related to the activities of the insolvency practitioner and the payment of remuneration to him: labor or civil.

Article 20, paragraph 1 The Bankruptcy Law established that the insolvency practitioner is a subject of professional activity and carries out professional activities.

Federal law dated December 30, 2008 No. 296-FZ “On Amendments to the Federal Law “On Insolvency (Bankruptcy)” Law on bankruptcy was supplemented with Article 20.6, in accordance with paragraph 5 of which the size of the fixed part (monthly) remuneration of the insolvency practitioner depends only on the volume and complexity of the work he performs, and not on its results, that is, as when working under an employment contract, and not under a civil law contract. Payment procedure in accordance with Article 20.6 The bankruptcy law also complied with labor legislation and the nature of the insolvency practitioner’s activities - monthly payments (fixed portion) and incentive payments (interest).

The Supreme Court of the Russian Federation in paragraph 13 of the Review of the practice of consideration by courts of cases related to the use of chapter 23 The Tax Code of the Russian Federation, approved by the Presidium of the Supreme Court of the Russian Federation on October 21, 2015, directly indicated that the activities of an insolvency practitioner are not entrepreneurial.

According to Article 129 Labor Code, when working on the basis of an employment contract, remuneration depends on the employee’s qualifications, complexity, quantity, quality and conditions of the work performed. Therefore, the grounds for reducing remuneration for such work are different and are established in Articles 137 And 138 Labor Code.

Labor activity means any activity carried out by persons of any sex and age for the purpose of producing goods or providing services for use by others or for their own use (Clause 1.1 of the Official Statistical Methodology for the Formation of a System of Indicators of Work Activity, Employment and Labor Underutilization Recommended by the 19th International Conference of Labor Statisticians, approved by order Federal State Statistics Service dated December 31, 2015 N 680).

Under clause 3 of Article 2 of the Industry Agreement on Insolvency (Bankruptcy) and Financial Rehabilitation for 2020–2022⁠ , the provisions Labor Code on social partnership and collective contractual regulation, including agreements, apply to relations arising when insolvency practitioners carry out professional activities, by virtue of the second paragraph Article 11 Labor Code, since they are related to their personal labor and by virtue of paragraphs eight to twelve Article 11 Labor Code, labor legislation and other acts containing labor law norms apply to insolvency practitioners.

Second paragraph Article 11 The Labor Code stipulates that labor legislation and other acts containing labor law norms also apply to other relations related to the use of personal labor, if provided for this Code or other federal law.

Paragraphs eight - twelve Article 11 The Labor Code provides that labor legislation and other acts containing labor law norms apply to insolvency practitioners.

The Supreme Court also indicated in its ruling No. 307-ES20-10788 dated August 20, 2020 in case No. A56-124198/2019 that labor legislation regarding the protection of collective rights of insolvency practitioners applies to relations related to the professional activities of insolvency practitioners.

It is obvious that the activities of an insolvency practitioner as a public official who ensures a balance of rights and interests of persons participating in a bankruptcy case and whose decisions are binding cannot be regulated by civil law. Neither the rules on contracts nor the rules on the provision of services can be applied to the work of the insolvency practitioner.

Balance of interests of participants

The activities of the insolvency practitioner should be equated to labor, in which remuneration depends on the qualifications of the employee, complexity, quantity, quality and conditions of the work performed, and not on its result and/or the presence or absence of funds in the bankruptcy estate, etc. The grounds for reducing the insolvency practitioner's remuneration must comply with Article 137 And 138 Labor Code.

It is also necessary to enter in Law on bankruptcy, changes that will eliminate the grounds for arbitration courts to apply to insolvency practitioners the regulation inherent in entrepreneurial activity, in which the result of the work is paid, and not its proper performance in accordance with job responsibilities, as well as volume and complexity.

It is necessary to state paragraph 1 of article 20 The Bankruptcy Law as follows:

“An insolvency practitioner is recognized as a citizen of the Russian Federation who is confirmed in office by the arbitration court. The insolvency practitioner ensures a balance of rights and legitimate interests of persons participating in a bankruptcy case; his decisions are binding. The insolvency practitioner is an official exercising government powers and carries out professional activities regulated by this Federal Law. The insolvency practitioner does not have the right to engage in other types of professional and entrepreneurial activities, with the exception of scientific, creative, teaching, provided that such activities do not affect the proper performance of his duties established by this Federal Law. An insolvency practitioner has the right to be a member of only one self-regulatory organization.”

Needs to be supplemented paragraph 1 of article 20.6 The second paragraph of the Bankruptcy Law reads as follows:

“The remuneration of the insolvency practitioner cannot be lower than the minimum established by this Federal Law. Deductions from the insolvency practitioner’s remuneration are possible only in the manner and on the grounds provided for by labor legislation.”

Increasing social and labor guarantees for insolvency practitioners, including decent remuneration, is an important element of their independence, which was also pointed out by O.R. Zaytsev: “decent payment is a guarantee of the manager’s independence (more about the importance of the manager’s remuneration and the various mechanisms for calculating it in the UNCITRAL guide for legislative bodies on issues of insolvency law)”⁠ .

Practical conclusions

The problem of delegation of judicial powers to insolvency practitioners

On November 30, 2018, the Supreme Court of the Russian Federation introduced bill No. 598603-7 to the State Duma on transferring to insolvency practitioners the function of including creditors’ claims in the register of creditors’ claims⁠ .

The explanatory note to the bill states that the fundamental idea of ​​the project is to empower insolvency practitioners to establish creditors' claims against the debtor in the register of creditors' claims and consider their validity.

It is proposed to shift the primary stage of checking the validity of the claim to the insolvency practitioner.

This will lead to the fact that undisputed claims for which there are no objections will not reach the court, which will reduce the load on judges, reduce the cost of sending court correspondence, and save the time, effort and attention of judges and court staff for complex cases in which there is a real dispute about the law and requiring significant labor costs.

However, the mechanical transfer of the powers of the court to the insolvency practitioner proposed by the bill without providing the proper legal status, the appropriate degree of responsibility for decisions made and, most importantly, legislative guarantees similar to those provided to the court when considering specific disputes, creates very high risks of incorrect formation of the register of claims, which may lead to a violation of the rights of creditors and the debtor.

Similar provisions are contained in a bill developed by the Ministry of Energy and currently under consideration by the State Legal Administration of the President of the Russian Federation⁠ .

The transfer of certain judicial functions to insolvency practitioners was also provided for by bill No. 792949-7⁠ , the explanatory note to which states that “... every year the number of bankruptcy cases of citizens is steadily growing, the number of rehabilitation procedures is decreasing, which means that the income of citizens does not allow debt restructuring.

This indicates that, for the most part, judicial consideration of such bankruptcy cases is labor-intensive, ineffective and expensive.

This draft federal law is aimed at introducing a new extrajudicial procedure for declaring a citizen bankrupt, new to Russian legislation. It is proposed to entrust the support of an out-of-court bankruptcy procedure to a citizen to an insolvency practitioner, who will be obliged to check the citizen’s compliance with the requirements set by law and certify this fact.

The adoption of this draft federal law will help reduce the burden on the courts and increase the accessibility and efficiency of bankruptcy for citizens."

Proposals to change the law

Thus, it is obvious that the courts are currently overloaded with uncontroversial or uniform (routine) events that do not require highly qualified judges. The transfer of judicial powers to insolvency practitioners is impossible without vesting the latter with judicial powers.

According to Art. 1 of the Federal Constitutional Law “On the Judicial System”, judicial power in the Russian Federation is exercised only by the courts represented by judges and jurors and arbitration assessors involved in the procedure established by law in the administration of justice. No other bodies or persons have the right to take over the administration of justice.

According to paragraph 1 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated November 10, 2011 No. 70 “On some issues related to the participation of arbitration assessors in the administration of justice,” arbitration assessors are involved in the administration of justice in arbitration courts of first instance in accordance with the Arbitration Procedure Code of the Russian Federation and other federal laws at the request of a party due to the particular complexity of the case and (or) the need to use special knowledge in the field of economics, finance, and management.

It is obvious that insolvency practitioners are essentially the subjects involved in the administration of justice in arbitration courts due to the particular complexity of bankruptcy cases and the need to use special knowledge in the field of economics, finance, and management.

In this connection, it seems most appropriate to give insolvency practitioners the status of arbitration assessors, for which it is necessary paragraph 1 of article 1 Federal Law No. 70-FZ of May 30, 2001 “On Arbitration Assessors of Arbitration Courts of Subjects of the Russian Federation” should be supplemented with the following words:

“...as well as insolvency practitioners, vested in the manner established by federal law, with the authority to conduct procedures applied in bankruptcy cases.” Similarly, the power to determine the distribution of work was transferred from the state to the professional community of lawyers Federal law dated July 29, 2017 No. 269-FZ “On Amendments to Articles 31 and 37 of the Federal Law “On Advocacy and the Bar in the Russian Federation.”

On the same basis, arbitration courts and insolvency practitioners can redistribute powers, for example, when considering the validity of creditors’ claims or in simplified bankruptcy procedures.

Thus, in order to delegate certain functions of arbitration courts to insolvency practitioners, the latter must be included in the system of administration of justice, that is, they must be endowed with the status of an arbitration assessor with the right to make procedural decisions with publication in an electronic file, including requesting evidence, considering creditors’ claims, conducting simplified bankruptcy procedures for citizens, requesting information from any bodies, organizations, citizens and officials, etc.

The status of an arbitration assessor, among other things, provides the insolvency practitioner with guarantees of independence and inviolability, which must be ensured in order to protect the insolvency practitioner from unfair (including extra-procedural) influence when making decisions.

The independence of insolvency practitioners is currently a debated issue that is of great concern to a wide range of both scientists and practitioners. The problem of dependence of managers on certain creditors, on the debtor, and on persons controlling the debtor is well known.

“The insolvency practitioner is dependent either on a specific person or on a group of persons, on whose initiative he entered into bankruptcy proceedings. We see a solution to the problem of dependence of insolvency practitioners and building a balance of interests between creditor and debtors in the mechanism for rating insolvency practitioners.

In our opinion, if this does not happen, there will be no real economic efficiency from bankruptcy, no transparency, no independence of bankruptcy managers from everyone except law about bankruptcy,” said Oksana Mucharaeva, head of the department for project work with the largest and problem debtors of the Department for Supporting Bankruptcy Procedures of the Federal Tax Service of Russia, at the Pravo.ru conference.⁠ .

The current legal regulation does not always allow the removal of a manager affiliated with a particular person participating in a bankruptcy case. One of the guarantees of the independence of insolvency practitioners if they are given the status of arbitration assessor will be the institution of challenge of judges, which also applies to arbitration assessors according to clause 3 art. 21 Agroindustrial complex of the Russian Federation.

You should also support the Resolution of the Congress of the All-Russian Trade Union of insolvency practitioners “On the tasks and further actions of the Trade Union to protect the social and labor rights and economic interests of Trade Union members in modern conditions”, clause 3.4. which, in order to ensure guarantees of the independence of insolvency practitioners as officials performing public law functions, proposed the following initiative:

“-in criminal legislation it is necessary to include insolvency practitioners in the list of categories of persons in respect of whom a special procedure for proceedings in criminal cases is applied (Art. 447 Code of Criminal Procedure of the Russian Federation), equating them to judges of the federal arbitration court, and stipulating that they belong to government representatives (note to Art. 318 Criminal Code of the Russian Federation)".

It should be noted that the status of jury trustees in accordance with the Establishment of Commercial Courts and the Charter of their Legal Proceedings of 1832 has significant similarities with the status of arbitration assessors in accordance with the Federal Law of May 30, 2001 No. 70-FZ “On Arbitration Assessors of Arbitration Courts of Subjects of the Russian Federation”:

• lists of arbitration assessors and jury trustees are formed with the participation of public organizations;

• the arbitration assessor and the jury trustee are approved by the court;

• the arbitration assessor and the sworn trustee take an oath;

• The arbitration assessor and the sworn trustee have guarantees of independence and immunity.

As we see, historically, sworn trustees had a status close to that of an arbitration assessor today, which also indicates the possibility of granting insolvency practitioners the status of arbitration assessors.

Conclusions

To summarize this article, we can conclude the following:

• at present, the legal status of the insolvency practitioner does not correspond to his tasks, rights, duties and responsibilities; legislation and judicial practice contain mutually exclusive and contradictory provisions regarding its status;

• the most precise legal status of the insolvency practitioner was determined by the Constitutional Court of the Russian Federation in its acts, according to which the insolvency practitioner is an official vested with powers that are largely of a public law nature, confirmed in office by the arbitration court in the name of the Russian Federation to assist the court in considering bankruptcy cases and ensuring a balance of interests of persons participating in the case, the decisions of which are binding;

• the professional activities of insolvency practitioners cannot be regulated by civil law, which contradicts their status as a public official; labor legislation should be applied to the activities of insolvency practitioners;

• the legal status of an insolvency practitioner is, by its nature, closest to the status of an arbitration assessor, in connection with which it is proposed to legislatively grant insolvency practitioners the status of arbitration assessors, which will allow them to participate in the administration of justice and significantly relieve the courts (for example, consideration of requests for inclusion in the register of creditors’ claims, simplified bankruptcy of certain categories of legal entities, etc.);

• It is necessary to ensure legislatively guarantees of the independence and inviolability of the insolvency practitioner as an official who carries out public legal functions and is confirmed in office by the arbitration court in the name of the Russian Federation in the performance of his official duties, similar to the guarantees of the independence and inviolability of the arbitration assessor.

FOOTNOTES

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9. Belolikov A. The figure of an insolvency practitioner // Law and Economics. 2004. No. 12. P. 130. ↩
10. Popondopulo V.F. Competition law. M., 2001. S. 136–137; Skaredov G.I. Legal essence of insolvency practitioners. 2007. No. 4. P. 27; Shershenevich G.F. Doctrine of insolvency. Kazan, 1880. P. 289. ↩
11. Bogdanov E.V. Legal status of the arbitration (judicial) manager // Laws of Russia: experience, analysis, practice. 2014. No. 8. ↩
12. Egorova M.A. Mandatory self-regulation as an institution of private law. 2014. No. 4; Kononov A.L. Special opinion on the Resolution of the Constitutional Court of the Russian Federation of December 19, 2005 No. 12-P; Uksusova E.E. Competition proceedings and “mini-proceedings”. 2014. No. 7. pp. 44–52. ↩
13. Belykh V.S. Legal Basis for the Bankruptcy of Legal Entities: textbook. Ekaterinburg, 1996. P. 29; Theory and Practice of Crisis Management: university textbook / ed. by S.G. Belyaev and V.I. Koshkin. Moscow, 1996. P. 63. ↩
14. Galperin S.I. “Rights and obligations of a sworn trustee in a commercial insolvency case.” Published by L.M. bookstore Rotenberg in Ekaterinoslav, 1898. ↩
15. Shershenevich G.F. "Competition Law", Kazan, 1898, p. 225. ↩
16. Yukhnin A.V. Legal Problems in Organising the Activities of Insolvency Practitioners: Candidate of Legal Sciences dissertation. Moscow, 2005; see also: Dorokhina E.G. Legal Status of an Insolvency Practitioner in the Bankruptcy of an Organisation: Candidate of Legal Sciences dissertation. 2004; Krepyakov V.P. Administrative and Legal Regulation of Crisis Managers’ Activities: Candidate of Legal Sciences dissertation. 2011. ↩
17. Industry Agreement on Insolvency (Bankruptcy) and Financial Rehabilitation for 2020–2022, approved by the All-Russian Trade Union of Insolvency Practitioners and the All-Russian Sectoral Association of Employers in Law and Self-Regulatory Organisations of Insolvency Practitioners on December 31, 2019; published in the ConsultantPlus and Garant legal reference systems. ↩
18. Zaitsev O.R. decree. op. ↩
19. Bill No. 598603-7 On amendments to the Federal Law “On Insolvency (Bankruptcy)” (in terms of clarifying the procedure for including creditors’ claims in the register), https://sozd.duma.gov.ru/bill/598603-7; ↩
20. Publication of ORPAU in Telegram dated October 1, 2020. ↩
21. Bill No. 792949-7 On amendments to the Federal Law “On Insolvency (Bankruptcy)” and certain legislative acts of the Russian Federation in terms of extrajudicial bankruptcy of a citizen (in terms of extrajudicial bankruptcy of a citizen); https://sozd.duma.gov.ru/bill/792949-7; ↩
22. Material from Pravo.ru on the independence of insolvency practitioners. ↩