A Bill to Reform Subsidiary Liability in Bankruptcy Has Been Introduced to the State Duma
On June 25, Bill No. 1271176-8 was introduced to the State Duma, proposing a significant reform of the institution of subsidiary liability of controlling persons of debtors. The authors of the initiative justify the need for changes by noting that over the past five years the rate of granted applications has consistently exceeded 50%, and in 2025 their number surpassed 3,000 for the first time. A tool originally conceived as an exceptional measure has turned into a mechanism for unconditionally shifting corporate debts onto its directors and beneficiaries.
The key innovations are aimed at individualizing liability. Intent to cause harm to creditors is proposed as a mandatory condition for imposing liability, while the statutory presumptions of causing bankruptcy donot in themselves establish intent. Proportional (several) liability is introduced as the default model for cases of joint causation of harm, replacing the current joint and several liability. Solidarity is preserved only where the actions of each respondent were independently sufficient to cause objective bankruptcy. The court is granted the power to reduce the amount of recovery where it is manifestly disproportionate, and gross negligence on the part of the creditor itself may result in the exclusion of its claim from the scope of liability.
The proposed discharge mechanism deserves particular attention. Discharge becomes available no earlier than 10 years after the judicial act imposing liability, provided that the debtor has cooperated in good faith with the court and creditors during a subsequent personal bankruptcy procedure. We recommend monitoring the progress of this bill, as its adoption would substantially alter the established approaches to the conditions and scope of subsidiary liability.
