VUZ-Bank ready to make debtors go bust

19 February 2010 (11:08)

OAO VUZ-Bank (Life Financial Group) normally makes about 70% of its bad debtors go bust. The bank can let a debtor have the debts restructured only in 30% of cases, the bank’s Chairman of the Supervisory Board Andrei Zolotukhin said in the course of round table discussion on bankruptcy vs. restructuring in Yekaterinburg.

‘The banks are willing to restructure the debts, but it all depends on the debtors. The borrowing parties often claim to be ready for this, but reality proves different. This is a very common thing. So the bank needs to protect its interests and to make the business undergo bankruptcy proceedings. Any restructuring, after all, is only a postponement of the problem,’ Zolotukhin observed.

He explained the restructuring procedure takes three to five years to complete.

‘We all know the creditors’ rights are protected badly here, so we often just have to make the debtors go bust. I’d say about 30% of companies can manage the restructuring process and avoid bankruptcy afterwards,’ the bank executive noted.

Nevertheless, the majority of bank representatives who took part in the discussion said they were willing to cooperate and support the business: after all, once you lose a customer during a recession, you are not likely to get them back when the good times return.

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