Formation of the mechanism and methods for developing a corporate solvency recovery plan as a factor of improving the bankruptcy institution in the Russian Federation
Importance The Russian institution of bankruptcy demonstrates low efficiency in terms of debtors' financial sanitation, since receivership prevails among bankruptcy procedures. The article investigates reasons why the potential of the Russian bankruptcy institution for financial recovery is inefficiently utilized. There is a need to develop a methodological framework for financial recovery planning to enhance the efficiency of bankruptcy processes, and a method to resolve conflicts of interests between creditors and debtors. I scrutinize the substance of corporate solvency and the existing legislative practice of outlining such plans, and find their specifics. Objectives The research aims at forming a mechanism and methods for corporate solvency recovery planning as part of bankruptcy procedures, considering the specifics of the effective laws of the Russian Federation on insolvency. The research also pursues practical recommendations and guidelines on streamlining the bankruptcy procedures in Russia. Methods Using methods of scientific research (analysis, synthesis), I analyze various aspects of the bankruptcy institution in Russia. I also use anti-crisis tools used to better substantiate economic decisions as part of bankruptcy procedures. Furthermore, I determine the most effective tools to improve the potential of the bankruptcy procedure for financial recovery. Results I formulate the mechanism and methods for corporate solvency recovery planning. The specific aspect is that the mechanism and methods focus on ensuring business sustainability strategically, making provisions and competitive advantages in the process of business financial sanitation, allow their application within any bankruptcy procedures, consider requirements of the current legislation on insolvency, and increase the reliability and unbiased nature of plans. Conclusions and Relevance Currently, the proposed mechanism and methods for corporate solvency recovery planning arrange for substantial enhancement of the potential the Russian bankruptcy institution has, since they significantly increase the quality of substantiating economic decisions pursuing to prevent businesses from a complete collapse as a result of adverse effects of the crisis.
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