Supreme Court of Russia outlined the right of creditors to challenge the results of auction

The Economic Board considered the complaint of a buyer of property sold at the auction. A bankrupt farm machinery was put up for sale in the framework of insolvency case, and the winner paid for the purchase and received goods.

However, the debtor's creditors turned out to be dissatisfied with this state of affairs and challenged the auction. The first-instance court upheld the claim and canceled the transaction. The court of appeal, however, found no violations, but the district court agreed with the court of first instance.

When considering the case, the Economic Board of the Supreme Court of Russia noted that creditors had the right to challenge the results of the auction, but only if they affected their property interests.

In the case under consideration, the price of the sold property was set according to its market value, the buyer paid the price, thereby replenishing the bankruptcy estate, and the creditors' references to the fact that the bankrupt company was an agricultural producer was considered belated. The Economic Board noted that until the results of the auction were challenged, the issue of the debtor's special status and the procedure for the sale of his property, which are possible for agricultural producers, had not been raised. Moreover, the creditors did not prove that the disputed property could have been sold at a higher price.

As a result, the Supreme Court of Russia upheld the decision of the appeal, canceling the judicial act of the district court (decision No. 306-ES20-20044 (6) of November 25, 2021).