A large holding company from the Netherlands has requested to liquidate its group of subsidiaries in the Russian Federation. The termination of activities is due to the decision of participants from an unfriendly country to leave the Russian market and liquidate their subsidiaries in order to reduce costs.

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The project was accompanied by a number of significant difficulties. Thus, the Holding had long-term bank guarantees, creditors' claims and the Company had participants from an unfriendly country. Participants were indebted in the form of loans. After the imposition of sanctions, cooperation between Russian banks and banks from unfriendly countries decreased. There are few banks left that make currency transfers to the required jurisdictions. In addition, subsidiaries in the Russian Federation were corporately linked to each other and required their consistent liquidation with the redistribution of assets.

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The client was tasked with carrying out the liquidation procedure without the risk of bankruptcy and negotiating with banks and creditors. Our lawyers drew up a unified action plan and coordinated the interaction of structures to repay mutual obligations, calculate tax liabilities, and dismiss staff in a timely manner without affecting the completion processes.

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In the process of satisfying creditors' claims, lawyers were faced with the fact that the company being liquidated did not have a bank account that could make payments to the creditor member. The problem was solved by concluding an agreement with the participant to settle the debt, as the creditor was ready to write off the debt in order to quickly liquidate the Russian asset. Lawyers issued debt relief as gratuitous financial assistance that is not subject to income tax, which led to the offset of counterclaims while minimizing taxes. As a result of smart actions, the Client was able to successfully liquidate a group of subsidiaries and minimize tax consequences. We also managed to distribute the remaining assets to members within the group.