LINKED TRANSACTIONS IN BANKRUPTCY WILL BE EASIER TO CHALLENGE

The Ministry of Economic Development and Trade proposed to amend the legislation on bankruptcy in order to simplify the procedure for challenging linked and potentially invalid transactions of the debtor.  The initiative lies in the need to specify the conditions for challenging the chain of transactions in the insolvency law, by means of which the unscrupulous pre-bankrupts cover up the withdrawal of their assets.

At the moment, the law does not prohibit challenging such agreements, however, it does not specify the procedure for action and does not provide clear criteria for the illegality of transactions.

The importance of adoption of the amendments lies in the fact that after the initiation of insolvency cases, it is not uncommon for a number of debtor's transactions to be identified, each of which, as a rule, has an appearance of independent transaction, but all of them follow only the purpose of asset stripping.

An example of such a situation is the sale of a car at a retail price with the subsequent transfer of the received money under a loan agreement to a person affiliated with the buyer of the car. From the first glance, each of the transactions has its own separate goal, but in fact there is only one goal - the transfer of the debtor's assets to third parties to reduce the size of the future bankruptcy estate.

The idea of   the initiators of the bill is to allow the arbitration courts to invalidate the number of the debtor's transactions at once. At the moment, active work on the bill is underway, and soon it is planned to be published for public discussion, reports RBC.