Common property versus bankruptcy proceedings: conflict of interests of co-owners

Common property versus bankruptcy proceedings: conflict of interests of co-owners

Common property versus bankruptcy proceedings: conflict of interests of co-owners
The entrepreneur appealed to the court with a demand to invalidate the auction for the sale of the debtor's property (case no. A32-59424/21).

The Court of first instance declared invalid the results of the auctions conducted in the "auction with an open form for submitting price proposals" procedure. The rights and obligations of the buyer of shares of land belonging to the debtor have been transferred to the entrepreneur.

The appeal overturned the ruling of the court of first instance, rejecting the application.

The cassation sent the dispute for reconsideration and pointed out that the disputed land plots are jointly owned by several individuals. At the same time, the court of first instance transferred the rights of the buyer of the debtor's shares to one of the individual entrepreneurs, without resolving the issue of the rights of the other co–owners.

In turn, the court of appeal sent a ruling to the above-mentioned persons, in which it proposed to express its will to agree to purchase land plots and confirm the relevant financial capabilities. The court of appeal did not specify the rule of law on the basis of which a pre-emptive purchase is made at the stage of appeal by co-owners.

In addition, when considering this separate dispute, the persons involved in the case argued that the disputed land plots were subject to the regulation of legislation on the turnover of agricultural land. The mentioned provisions of the legislation on the turnover of agricultural land were not properly taken into account by the judicial authorities.


Photo: Freepik

01.10.2025