ASSESSMENT OF THE ECONOMIC FEASIBILITY OF SELLING A SHARE IN AN APARTMENT IN A BANKRUPTCY CASE

The debtor applied to the court for the exclusion from the bankruptcy estate of 1/3 of the share in the right of common joint ownership of residential premises (case no. A62-3398/24).

In rejecting the application, the courts of the two instances proceeded from the fact that the share of the disputed property does not have executive immunity and its value exceeds the minimum prescribed by law for exclusion from the bankruptcy estate.

The cassation sent the dispute for reconsideration, pointing out the following: 

• The liquidity of the disputed asset and the prospects for replenishment of the bankruptcy estate as a result of its sale were not properly assessed. The debtor pointed out that the sale of 1/3 of the share in the right seemed unlikely due to the investment unattractiveness of such property, made no economic sense and would not be able to influence the satisfaction of creditors' claims. 
• The lower courts limited themselves to stating that the value of the disputed property exceeds the established minimum and it does not have executive immunity, ignoring other significant factors. 
• The issue of the debtor's only home has not been investigated. The financial manager identified the debtor's other home as the only one, but did not substantiate the reason why the debtor did not live with his family. There is no information on whether the other dwelling is the debtor's personal property or the joint property of the spouses. 
• The courts should have taken into account the place of actual residence of the debtor and his family members in order to correctly determine the property with executive immunity. 

 

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