SUPREME COURT OF RUSSIA DID NOT ALLOW THE ASSETS OF THE DEBTOR TO BE WITHDRAWN BY CONCLUDING AN AGENCY AGREEMENT

Within the framework of the insolvency case, the bankruptcy trustee of the debtor tried to challenge the agency agreement concluded between the potential bankrupt and a third party. The trustee was confused by the fact that the agreement was signed immediately after the initiation of the principal's insolvency case. The opinions of the courts on this issue were different, but the Supreme Court of Russia put an end to it.

When considering the application in the court of first instance, the position of the trustee was upheld, and the concluded agreement was declared invalid as a transaction.

As arguments for this, the court sounded the fact that when concluding the agreement, the parties did not pursue the achievement of reasonable economic goals, but only contributed to the withdrawal of the debtor's assets and the increase in accounts payable.

However, this position was doubted by the appeal and district courts. The boards of both instances indicated that the agent, who entered into agreement with the future bankrupt, could not have known about the insolvency of the latter. Moreover, at the time of signing the agreement, the debtor himself did not yet have signs of insolvency. In this case, the transaction itself was made with an equivalent counter provision.

The Supreme Court of Russia did not agree with such conclusions. Its board recalled that the building of the shopping center, which the debtor had rented out for several years before the bankruptcy, was the main asset.

Until the initiation of the insolvency case, all actions on the lease legal relationship were performed by the debtor independently.

The agency agreement was concluded only after the initiation of bankruptcy, and another person began to perform the functions that the landlord had previously been doing himself.

Thus, the economic board agreed with the position of the court of first instance, which indicated that the parties did not agree on reasonable economic goals. The result of the consideration of the case was the cancellation of the decisions of the courts of appeal and cassation (resolution No. 308-ES18-14832 (5) dated July 8, 2021).