RusBankrot
We know everything about bankruptcy
05/12/2025
Friday
THIS DAY IN HISTORY:
5 December 
1936 The Stalinist Constitution of the USSR was adopted.
1936 the Stalinist constitution of the USSR was adopted.
1484 Pope Innocent VII initiated the "witch hunt".
1456 An earthquake that destroyed Naples occurred - 35 thousand people died.
1456 occurred an earthquake that destroyed Naples - 35 thousand people died.
5 December
1936 The Stalinist Constitution of the USSR was adopted.
1936 the Stalinist constitution of the USSR was adopted.
1484 Pope Innocent VII initiated the "witch hunt".
1456 An earthquake that destroyed Naples occurred - 35 thousand people died.
1456 occurred an earthquake that destroyed Naples - 35 thousand people died.
Paying the living wage to a bankrupt: where to draw the line?
The debtor applied to the court to challenge the financial manager's inaction and to dismiss him from his duties in the bankruptcy case (case no. A76-27033/18).
The court of first instance granted the application, since the payment of the subsistence minimum to the debtor must be made by the financial manager independently, out of court, if there are funds in the bankruptcy estate, regardless of the source of their formation and the debtor's request. Having established that, if there were funds in the bankruptcy estate, the financial manager was obliged to make such payments from a certain period until the end of the property sale procedure or the exhaustion of the bankruptcy estate, the court declared illegal the inaction of the financial manager, which resulted in non-payment of the subsistence minimum to the debtor.
The appeal changed the definition, noting that during the disputed period, funds entered the bankruptcy estate unevenly, respectively, in some months there were not enough funds to pay the subsistence level. The amount of unpaid living wage for the entire period was determined by the court. In order to restore the violated rights of the debtor, the court imposed on the financial manager the obligation to exclude and pay the debtor the minimum subsistence allowance for the entire period of inactivity, but within the limits of the amount in the bankruptcy estate.
The cassation court annulled the judicial acts in part and sent the dispute for a new hearing. The court pointed out that the debtor's complaint was based on the financial manager's failure to allocate him a living wage from funds starting from a certain date when the debtor lost his job. The courts linked the satisfaction of the complaint with episodes of non-payment of the minimum wage to the debtor both during the term of office of the current financial manager and during the period of performance of duties by the previous manager.
However, the courts did not provide any legal grounds for satisfying the complaint against the actions of the current financial manager in relation to the period when the previous manager performed his duties. In addition, the arguments of the financial manager that the mechanism for providing the debtor with funds in the amount of the subsistence minimum is used by the debtor to reduce the bankruptcy estate and infringe on the rights of creditors have not been evaluated.
The District Court also noted that when resolving the issue of the possibility of retrospectively reimbursing the debtor for the cost of living, it concluded that compensation was provided at the expense of the bankruptcy estate, which effectively shifts responsibility for the illegal actions of the manager to creditors.
Photo: Freepik
The court of first instance granted the application, since the payment of the subsistence minimum to the debtor must be made by the financial manager independently, out of court, if there are funds in the bankruptcy estate, regardless of the source of their formation and the debtor's request. Having established that, if there were funds in the bankruptcy estate, the financial manager was obliged to make such payments from a certain period until the end of the property sale procedure or the exhaustion of the bankruptcy estate, the court declared illegal the inaction of the financial manager, which resulted in non-payment of the subsistence minimum to the debtor.
The appeal changed the definition, noting that during the disputed period, funds entered the bankruptcy estate unevenly, respectively, in some months there were not enough funds to pay the subsistence level. The amount of unpaid living wage for the entire period was determined by the court. In order to restore the violated rights of the debtor, the court imposed on the financial manager the obligation to exclude and pay the debtor the minimum subsistence allowance for the entire period of inactivity, but within the limits of the amount in the bankruptcy estate.
The cassation court annulled the judicial acts in part and sent the dispute for a new hearing. The court pointed out that the debtor's complaint was based on the financial manager's failure to allocate him a living wage from funds starting from a certain date when the debtor lost his job. The courts linked the satisfaction of the complaint with episodes of non-payment of the minimum wage to the debtor both during the term of office of the current financial manager and during the period of performance of duties by the previous manager.
However, the courts did not provide any legal grounds for satisfying the complaint against the actions of the current financial manager in relation to the period when the previous manager performed his duties. In addition, the arguments of the financial manager that the mechanism for providing the debtor with funds in the amount of the subsistence minimum is used by the debtor to reduce the bankruptcy estate and infringe on the rights of creditors have not been evaluated.
The District Court also noted that when resolving the issue of the possibility of retrospectively reimbursing the debtor for the cost of living, it concluded that compensation was provided at the expense of the bankruptcy estate, which effectively shifts responsibility for the illegal actions of the manager to creditors.
Photo: Freepik
04.06.2025
