As foreign companies seek to exit Russia over the war in Ukraine, they face the prospect that Russian bankruptcy law could be used to seize assets and even lead to criminal penalties, Reuters reported. In the U.S., bankruptcy laws are meant to give indebted companies a fresh start. Distressed companies in the U.S. usually enter bankruptcy willingly and the law lets them retain existing management and control over assets. Russia's law, however, generally prioritizes the needs of creditors who are owed money. This means that creditors, including the Russian government, can force a company into involuntary bankruptcy and oust its management. Some legal experts said foreign companies fear Russian creditors could abuse that process to install leaders willing to sell their assets to business rivals or companies aligned with the Russian government.
