Supreme court of Russia put an end to the case on the exclusion of the only housing from bankruptcy estate

The Economic Board of the Supreme Court of Russia considered the complaint of one of the debtor's creditors, who remained dissatisfied with the ruling issued by the district court to exclude the debtor's land plot and residential building from the bankruptcy estate.  At the same time, the bankrupt insisted that the disputed real estate was his only housing, and it was impossible to put it in the bankruptcy estate.

When considering the fate of the property, the courts of the first and appellate instances concluded that the debtor was unscrupulous.

The judges noted that the registration at the place of residence in the disputed real estate object was carried out after the initiation of an insolvency case, and the bankruptcy trustee did not find any other property, except for the house and land.

At the same time, the district agreed with the objections of the debtor meet and satisfied his claims, indicating that the courts did not take into account the fact of absence of any other facility suitable for living of the debtor and his family.

As for the position of the Supreme Court of Russia, the Economic Board concluded that all three instances adopted incorrect decisions and canceled each of them.

The highest court noted that the rules on enforcement immunity do not exclude the possibility of deterioration in the living conditions of the debtor. At the same time, the provision of new housing should be at least within the boundaries of the same settlement where the old one was located, with an area not less than established according to the norms for the provision of housing for social rent.

What is more, the Supreme Court indicated that the rejection of the right to enforcement immunity should have a real economic sense in the form of the sale of property exempted from protection, but not just be a sanction for the debtor or source of intimidation.

The result of the consideration of the complaint was the cancellation of all previously issued decisions and the referral of the dispute for reconsideration (decision № 303-ES20-18761 of July 26, 2021 in case № A73-12816 / 2019).