diff --git a/compiler/frontend/src/org/jetbrains/jet/lang/parsing/JetExpressionParsing.java b/compiler/frontend/src/org/jetbrains/jet/lang/parsing/JetExpressionParsing.java
index 9f6affc057d..cf288bc56de 100644
--- a/compiler/frontend/src/org/jetbrains/jet/lang/parsing/JetExpressionParsing.java
+++ b/compiler/frontend/src/org/jetbrains/jet/lang/parsing/JetExpressionParsing.java
@@ -1425,9 +1425,29 @@ public class JetExpressionParsing extends AbstractJetParsing {
             PsiBuilder.Marker catchBlock = mark();
             advance(); // CATCH_KEYWORD
 
-            myJetParsing.parseValueParameterList(false, TokenSet.create(LBRACE, FINALLY_KEYWORD, CATCH_KEYWORD));
+            TokenSet recoverySet = TokenSet.create(LBRACE, FINALLY_KEYWORD, CATCH_KEYWORD);
+            if (atSet(recoverySet)) {
+                error("Expecting exception variable declaration");
+            }
+            else {
+                PsiBuilder.Marker parameters = mark();
+                expect(LPAR, "Expecting '('", recoverySet);
+                if (!atSet(recoverySet)) {
+                    myJetParsing.parseValueParameter();
+                    expect(RPAR, "Expecting ')'", recoverySet);
+                }
+                else {
+                    error("Expecting exception variable declaration");
+                }
+                parameters.done(VALUE_PARAMETER_LIST);
+            }
 
-            myJetParsing.parseBlock();
+            if (at(LBRACE)) {
+                myJetParsing.parseBlock();
+            }
+            else {
+                error("Expecting a block: { ... }");
+            }
             catchBlock.done(CATCH);
         }
 
diff --git a/compiler/frontend/src/org/jetbrains/jet/lang/parsing/JetParsing.java b/compiler/frontend/src/org/jetbrains/jet/lang/parsing/JetParsing.java
index d63f9dc663d..7ad2cd9ced8 100644
--- a/compiler/frontend/src/org/jetbrains/jet/lang/parsing/JetParsing.java
+++ b/compiler/frontend/src/org/jetbrains/jet/lang/parsing/JetParsing.java
@@ -1702,7 +1702,7 @@ public class JetParsing extends AbstractJetParsing {
         return parseValueParameter(true);
     }
 
-    private void parseValueParameter() {
+    public void parseValueParameter() {
         parseValueParameter(false);
     }
 
diff --git a/compiler/testData/psi/TryRecovery.jet b/compiler/testData/psi/TryRecovery.jet
new file mode 100644
index 00000000000..0bde1af86fb
--- /dev/null
+++ b/compiler/testData/psi/TryRecovery.jet
@@ -0,0 +1,61 @@
+fun testOpenParens() {
+    try {
+    } catch {
+    }
+
+    try {
+    } catch ( {
+    }
+
+    try {
+    } catch (e: {
+    }
+
+    try {
+    } catch (e: Exception {
+    }
+}
+
+fun testClosedParens() {
+    try {
+    } catch () {
+    }
+
+    try {
+    } catch (e) {
+    }
+
+    try {
+    } catch (e:) {
+    }
+
+    try {
+    } catch (e: Exception) {
+    }
+
+    try {
+    } catch (: Exception) {
+    }
+
+    try {
+    } catch (:) {
+    }
+
+}
+
+fun testFinally() {
+    try {
+    } catch
+    finally {
+    }
+
+    try {
+    } catch ()
+    finally {
+    }
+
+    try {
+    } catch (e : Exception)
+    finally {
+    }
+}
\ No newline at end of file
diff --git a/compiler/testData/psi/TryRecovery.txt b/compiler/testData/psi/TryRecovery.txt
new file mode 100644
index 00000000000..7c09b2ad61e
--- /dev/null
+++ b/compiler/testData/psi/TryRecovery.txt
@@ -0,0 +1,374 @@
+JetFile: TryRecovery.jet
+  NAMESPACE_HEADER
+    <empty list>
+  FUN
+    PsiElement(fun)('fun')
+    PsiWhiteSpace(' ')
+    PsiElement(IDENTIFIER)('testOpenParens')
+    VALUE_PARAMETER_LIST
+      PsiElement(LPAR)('(')
+      PsiElement(RPAR)(')')
+    PsiWhiteSpace(' ')
+    BLOCK
+      PsiElement(LBRACE)('{')
+      PsiWhiteSpace('\n    ')
+      TRY
+        PsiElement(try)('try')
+        PsiWhiteSpace(' ')
+        BLOCK
+          PsiElement(LBRACE)('{')
+          PsiWhiteSpace('\n    ')
+          PsiElement(RBRACE)('}')
+        PsiWhiteSpace(' ')
+        CATCH
+          PsiElement(catch)('catch')
+          PsiErrorElement:Expecting exception variable declaration
+            <empty list>
+          PsiWhiteSpace(' ')
+          BLOCK
+            PsiElement(LBRACE)('{')
+            PsiWhiteSpace('\n    ')
+            PsiElement(RBRACE)('}')
+      PsiWhiteSpace('\n\n    ')
+      TRY
+        PsiElement(try)('try')
+        PsiWhiteSpace(' ')
+        BLOCK
+          PsiElement(LBRACE)('{')
+          PsiWhiteSpace('\n    ')
+          PsiElement(RBRACE)('}')
+        PsiWhiteSpace(' ')
+        CATCH
+          PsiElement(catch)('catch')
+          PsiWhiteSpace(' ')
+          VALUE_PARAMETER_LIST
+            PsiElement(LPAR)('(')
+            PsiErrorElement:Expecting exception variable declaration
+              <empty list>
+          PsiWhiteSpace(' ')
+          BLOCK
+            PsiElement(LBRACE)('{')
+            PsiWhiteSpace('\n    ')
+            PsiElement(RBRACE)('}')
+      PsiWhiteSpace('\n\n    ')
+      TRY
+        PsiElement(try)('try')
+        PsiWhiteSpace(' ')
+        BLOCK
+          PsiElement(LBRACE)('{')
+          PsiWhiteSpace('\n    ')
+          PsiElement(RBRACE)('}')
+        PsiWhiteSpace(' ')
+        CATCH
+          PsiElement(catch)('catch')
+          PsiWhiteSpace(' ')
+          VALUE_PARAMETER_LIST
+            PsiElement(LPAR)('(')
+            VALUE_PARAMETER
+              PsiElement(IDENTIFIER)('e')
+              PsiElement(COLON)(':')
+              PsiWhiteSpace(' ')
+              TYPE_REFERENCE
+                PsiErrorElement:Type expected
+                  <empty list>
+          BLOCK
+            PsiElement(LBRACE)('{')
+            PsiWhiteSpace('\n    ')
+            PsiElement(RBRACE)('}')
+      PsiWhiteSpace('\n\n    ')
+      TRY
+        PsiElement(try)('try')
+        PsiWhiteSpace(' ')
+        BLOCK
+          PsiElement(LBRACE)('{')
+          PsiWhiteSpace('\n    ')
+          PsiElement(RBRACE)('}')
+        PsiWhiteSpace(' ')
+        CATCH
+          PsiElement(catch)('catch')
+          PsiWhiteSpace(' ')
+          VALUE_PARAMETER_LIST
+            PsiElement(LPAR)('(')
+            VALUE_PARAMETER
+              PsiElement(IDENTIFIER)('e')
+              PsiElement(COLON)(':')
+              PsiWhiteSpace(' ')
+              TYPE_REFERENCE
+                USER_TYPE
+                  REFERENCE_EXPRESSION
+                    PsiElement(IDENTIFIER)('Exception')
+            PsiErrorElement:Expecting ')'
+              <empty list>
+          PsiWhiteSpace(' ')
+          BLOCK
+            PsiElement(LBRACE)('{')
+            PsiWhiteSpace('\n    ')
+            PsiElement(RBRACE)('}')
+      PsiWhiteSpace('\n')
+      PsiElement(RBRACE)('}')
+  PsiWhiteSpace('\n\n')
+  FUN
+    PsiElement(fun)('fun')
+    PsiWhiteSpace(' ')
+    PsiElement(IDENTIFIER)('testClosedParens')
+    VALUE_PARAMETER_LIST
+      PsiElement(LPAR)('(')
+      PsiElement(RPAR)(')')
+    PsiWhiteSpace(' ')
+    BLOCK
+      PsiElement(LBRACE)('{')
+      PsiWhiteSpace('\n    ')
+      TRY
+        PsiElement(try)('try')
+        PsiWhiteSpace(' ')
+        BLOCK
+          PsiElement(LBRACE)('{')
+          PsiWhiteSpace('\n    ')
+          PsiElement(RBRACE)('}')
+        PsiWhiteSpace(' ')
+        CATCH
+          PsiElement(catch)('catch')
+          PsiWhiteSpace(' ')
+          VALUE_PARAMETER_LIST
+            PsiElement(LPAR)('(')
+            VALUE_PARAMETER
+              PsiErrorElement:Parameter name expected
+                <empty list>
+            PsiElement(RPAR)(')')
+          PsiWhiteSpace(' ')
+          BLOCK
+            PsiElement(LBRACE)('{')
+            PsiWhiteSpace('\n    ')
+            PsiElement(RBRACE)('}')
+      PsiWhiteSpace('\n\n    ')
+      TRY
+        PsiElement(try)('try')
+        PsiWhiteSpace(' ')
+        BLOCK
+          PsiElement(LBRACE)('{')
+          PsiWhiteSpace('\n    ')
+          PsiElement(RBRACE)('}')
+        PsiWhiteSpace(' ')
+        CATCH
+          PsiElement(catch)('catch')
+          PsiWhiteSpace(' ')
+          VALUE_PARAMETER_LIST
+            PsiElement(LPAR)('(')
+            VALUE_PARAMETER
+              PsiElement(IDENTIFIER)('e')
+              PsiErrorElement:Parameters must have type annotation
+                <empty list>
+            PsiElement(RPAR)(')')
+          PsiWhiteSpace(' ')
+          BLOCK
+            PsiElement(LBRACE)('{')
+            PsiWhiteSpace('\n    ')
+            PsiElement(RBRACE)('}')
+      PsiWhiteSpace('\n\n    ')
+      TRY
+        PsiElement(try)('try')
+        PsiWhiteSpace(' ')
+        BLOCK
+          PsiElement(LBRACE)('{')
+          PsiWhiteSpace('\n    ')
+          PsiElement(RBRACE)('}')
+        PsiWhiteSpace(' ')
+        CATCH
+          PsiElement(catch)('catch')
+          PsiWhiteSpace(' ')
+          VALUE_PARAMETER_LIST
+            PsiElement(LPAR)('(')
+            VALUE_PARAMETER
+              PsiElement(IDENTIFIER)('e')
+              PsiElement(COLON)(':')
+              TYPE_REFERENCE
+                PsiErrorElement:Type expected
+                  <empty list>
+            PsiElement(RPAR)(')')
+          PsiWhiteSpace(' ')
+          BLOCK
+            PsiElement(LBRACE)('{')
+            PsiWhiteSpace('\n    ')
+            PsiElement(RBRACE)('}')
+      PsiWhiteSpace('\n\n    ')
+      TRY
+        PsiElement(try)('try')
+        PsiWhiteSpace(' ')
+        BLOCK
+          PsiElement(LBRACE)('{')
+          PsiWhiteSpace('\n    ')
+          PsiElement(RBRACE)('}')
+        PsiWhiteSpace(' ')
+        CATCH
+          PsiElement(catch)('catch')
+          PsiWhiteSpace(' ')
+          VALUE_PARAMETER_LIST
+            PsiElement(LPAR)('(')
+            VALUE_PARAMETER
+              PsiElement(IDENTIFIER)('e')
+              PsiElement(COLON)(':')
+              PsiWhiteSpace(' ')
+              TYPE_REFERENCE
+                USER_TYPE
+                  REFERENCE_EXPRESSION
+                    PsiElement(IDENTIFIER)('Exception')
+            PsiElement(RPAR)(')')
+          PsiWhiteSpace(' ')
+          BLOCK
+            PsiElement(LBRACE)('{')
+            PsiWhiteSpace('\n    ')
+            PsiElement(RBRACE)('}')
+      PsiWhiteSpace('\n\n    ')
+      TRY
+        PsiElement(try)('try')
+        PsiWhiteSpace(' ')
+        BLOCK
+          PsiElement(LBRACE)('{')
+          PsiWhiteSpace('\n    ')
+          PsiElement(RBRACE)('}')
+        PsiWhiteSpace(' ')
+        CATCH
+          PsiElement(catch)('catch')
+          PsiWhiteSpace(' ')
+          VALUE_PARAMETER_LIST
+            PsiElement(LPAR)('(')
+            VALUE_PARAMETER
+              PsiErrorElement:Parameter name expected
+                <empty list>
+              PsiElement(COLON)(':')
+              PsiWhiteSpace(' ')
+              TYPE_REFERENCE
+                USER_TYPE
+                  REFERENCE_EXPRESSION
+                    PsiElement(IDENTIFIER)('Exception')
+            PsiElement(RPAR)(')')
+          PsiWhiteSpace(' ')
+          BLOCK
+            PsiElement(LBRACE)('{')
+            PsiWhiteSpace('\n    ')
+            PsiElement(RBRACE)('}')
+      PsiWhiteSpace('\n\n    ')
+      TRY
+        PsiElement(try)('try')
+        PsiWhiteSpace(' ')
+        BLOCK
+          PsiElement(LBRACE)('{')
+          PsiWhiteSpace('\n    ')
+          PsiElement(RBRACE)('}')
+        PsiWhiteSpace(' ')
+        CATCH
+          PsiElement(catch)('catch')
+          PsiWhiteSpace(' ')
+          VALUE_PARAMETER_LIST
+            PsiElement(LPAR)('(')
+            VALUE_PARAMETER
+              PsiErrorElement:Parameter name expected
+                <empty list>
+              PsiElement(COLON)(':')
+              TYPE_REFERENCE
+                PsiErrorElement:Type expected
+                  <empty list>
+            PsiElement(RPAR)(')')
+          PsiWhiteSpace(' ')
+          BLOCK
+            PsiElement(LBRACE)('{')
+            PsiWhiteSpace('\n    ')
+            PsiElement(RBRACE)('}')
+      PsiWhiteSpace('\n\n')
+      PsiElement(RBRACE)('}')
+  PsiWhiteSpace('\n\n')
+  FUN
+    PsiElement(fun)('fun')
+    PsiWhiteSpace(' ')
+    PsiElement(IDENTIFIER)('testFinally')
+    VALUE_PARAMETER_LIST
+      PsiElement(LPAR)('(')
+      PsiElement(RPAR)(')')
+    PsiWhiteSpace(' ')
+    BLOCK
+      PsiElement(LBRACE)('{')
+      PsiWhiteSpace('\n    ')
+      TRY
+        PsiElement(try)('try')
+        PsiWhiteSpace(' ')
+        BLOCK
+          PsiElement(LBRACE)('{')
+          PsiWhiteSpace('\n    ')
+          PsiElement(RBRACE)('}')
+        PsiWhiteSpace(' ')
+        CATCH
+          PsiElement(catch)('catch')
+          PsiErrorElement:Expecting exception variable declaration
+            <empty list>
+        PsiWhiteSpace('\n    ')
+        FINALLY
+          PsiElement(finally)('finally')
+          PsiWhiteSpace(' ')
+          BLOCK
+            PsiElement(LBRACE)('{')
+            PsiWhiteSpace('\n    ')
+            PsiElement(RBRACE)('}')
+      PsiWhiteSpace('\n\n    ')
+      TRY
+        PsiElement(try)('try')
+        PsiWhiteSpace(' ')
+        BLOCK
+          PsiElement(LBRACE)('{')
+          PsiWhiteSpace('\n    ')
+          PsiElement(RBRACE)('}')
+        PsiWhiteSpace(' ')
+        CATCH
+          PsiElement(catch)('catch')
+          PsiWhiteSpace(' ')
+          VALUE_PARAMETER_LIST
+            PsiElement(LPAR)('(')
+            VALUE_PARAMETER
+              PsiErrorElement:Parameter name expected
+                <empty list>
+            PsiElement(RPAR)(')')
+          PsiErrorElement:Expecting a block: { ... }
+            <empty list>
+        PsiWhiteSpace('\n    ')
+        FINALLY
+          PsiElement(finally)('finally')
+          PsiWhiteSpace(' ')
+          BLOCK
+            PsiElement(LBRACE)('{')
+            PsiWhiteSpace('\n    ')
+            PsiElement(RBRACE)('}')
+      PsiWhiteSpace('\n\n    ')
+      TRY
+        PsiElement(try)('try')
+        PsiWhiteSpace(' ')
+        BLOCK
+          PsiElement(LBRACE)('{')
+          PsiWhiteSpace('\n    ')
+          PsiElement(RBRACE)('}')
+        PsiWhiteSpace(' ')
+        CATCH
+          PsiElement(catch)('catch')
+          PsiWhiteSpace(' ')
+          VALUE_PARAMETER_LIST
+            PsiElement(LPAR)('(')
+            VALUE_PARAMETER
+              PsiElement(IDENTIFIER)('e')
+              PsiWhiteSpace(' ')
+              PsiElement(COLON)(':')
+              PsiWhiteSpace(' ')
+              TYPE_REFERENCE
+                USER_TYPE
+                  REFERENCE_EXPRESSION
+                    PsiElement(IDENTIFIER)('Exception')
+            PsiElement(RPAR)(')')
+          PsiErrorElement:Expecting a block: { ... }
+            <empty list>
+        PsiWhiteSpace('\n    ')
+        FINALLY
+          PsiElement(finally)('finally')
+          PsiWhiteSpace(' ')
+          BLOCK
+            PsiElement(LBRACE)('{')
+            PsiWhiteSpace('\n    ')
+            PsiElement(RBRACE)('}')
+      PsiWhiteSpace('\n')
+      PsiElement(RBRACE)('}')
\ No newline at end of file