Challenging the contract for provision of legal services was recognized legal by Supreme Court of Russia

The Supreme Court of Russia considered an interesting case of challenging a legal services agreement concluded between the head of the debtor and a third-party company.  The contract was signed at the monitoring stage, and disagreement with its conclusion was expressed by the bankruptcy trustee appointed after.

The anti-crisis manager considered the document an attempt to withdraw the debtor's funds under the guise of fulfilling an obligation, but not all courts supported his point of view.

The court of first instance rejected his claims, among which there was a claim about the need to return estate the already paid 145 thousand rubles to the bankruptcy estate.

The judge considered that the service was provided properly, which meant that the payment was fair. The appeal, on the contrary, took the side of the bankruptcy trustee, indicating that the services rendered were the direct duties of the manager, who had his own tools for attracting specialists. However, the district court cancelled this decision, leaving in force the decision of the court of first instance.

Considering the cases in the Supreme Court of the Russian Federation, the three judges agreed with the arguments of the Court of Appeal, pointing out that the legal assistance declared in the contract to support financial recovery procedures or external management was not only not provided, but was not even required.

The financial recovery plan prepared under the agreement was submitted to the court, but did not find support of the manager, who recommended proceeding to the bankruptcy proceedings, referring to the insolvency of the debtor.

The result of the consideration of the dispute was cancellation of the decision of the district court and the upholding of the judicial act of the appeal instance (decision № 304-ES21-18182 of December 27, 2021).