SUPREME COURT : COLLATERAL LENDER HAS PRIORITY ON REPAYMENT OF MORATORIUM INTEREST

As part of the bankruptcy case (case no. A56-51728/20), the debtor's collateral (the only housing) was sold. The proceeds were used to repay the claims of the collateral creditor.

Referring to the fact that the funds were not transferred to the managers to repay the claims for the payment of penalties and moratorium interest, the collateral creditor appealed to the court with an application for the resolution of disagreements.

The courts of three instances unanimously resolved the issue in favor of the manager, noting that the direction of funds in favor of the secured creditor to repay the interest and penalties will violate the rights of other, non-secured creditors.

The Supreme Court of the Russian Federation referred the creditor's complaint to the board for consideration and noted that other creditors (other than collateral) have no right to claim the proceeds from the sale of the only housing. Therefore, the transfer of funds for settlements with the applicant (collateral creditor) for a penalty and a moratorium interest will not violate the rights of other creditors.

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