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Administration applications in the context of Russian Sanctions (Re VTB Capital PLC)

Published on: 29 July 2022
Published by: LexisPSL
  • Administration applications in the context of Russian Sanctions (Re VTB Capital PLC)
  • What are the practical implications of this case?
  • What was the background?
  • What did the court decide?
  • Case details

Article summary

Restructuring & Insolvency analysis: A UK-domiciled investment bank owned and controlled by the Russian Federation (the ‘company’) was subject to sanctions imposed following Russia’s invasion of Ukraine. As a result of those sanctions, the company’s bank account had been frozen, preventing it from meeting its day-to-day business expenses and continuing the gradual wind-down of its London business. The company was granted a licence by the UK Office of Financial Sanctions Implementation (OFSI) which effectively allowed it to make and receive payments in the course of its business, but only if it was under the control of a licensed insolvency practitioner. The company’s directors therefore applied for administrators to be appointed. The court held that it had jurisdiction to appoint administrators and that it ought to exercise its discretion to do so, because it would allow the company’s orderly winding-down to continue to the benefit of its creditors. However, it was not prepared to make that order immediately, because the proposed administrators had stated that their appointment would be nugatory unless a licence was granted to the company by the US Office of Foreign Asset Control (OFAC). The administrators would therefore not be appointed until evidence had been filed demonstrating that the company had been granted licences by both OFSI and OFAC. Written by Karl Anderson, barrister at 4 Stone Buildings. or take a trial to read the full analysis.

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