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SUPREME COURT: PENALTIES IN THE FRAMEWORK OF ENFORCEMENT PROCEEDINGS ARE NOT PREFERENTIAL TRANSACTIONS
SUPREME COURT: PENALTIES IN THE FRAMEWORK OF ENFORCEMENT PROCEEDINGS ARE NOT PREFERENTIAL TRANSACTIONS
This conclusion was reached by the Supreme Court of the Russian Federation following the consideration of the cassation appeal in the bankruptcy case No. A41-87429/19. In this case, the courts found that the debt owed to one of the creditors was confirmed by a judicial act that entered into force, on the basis of which enforcement proceedings were initiated.
on the basis of which enforcement proceedings were initiated.
During the said proceedings, collection orders were issued against the debtor, on the basis of which funds were written off in favor of the creditor. At the same time, as the courts found, the debtor had unfulfilled obligations to other creditors, which allowed them to qualify the write-offs as preference transactions and invalidate them.
The Supreme Court did not agree with this approach, pointing out that, despite the presence of signs of preference in the write-offs in the framework of enforcement proceedings in this case, the bankruptcy trustee did not prove the defendant's awareness of the debtor's insolvency.
It is worth noting that this reservation of the highest judicial instance does not allow us to put an end to the issue of qualifying performance write-offs as preferential transactions, since if the defendant's awareness of the dispute about challenging the debtor's insolvency transaction in the relevant period is proved, this position of the Supreme Court of the Russian Federation will not apply.
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