Supreme Court of Russia resolved the dispute with the executive immunity of debtor

The Supreme Court of Russia considered the case on the complaint of a bankruptcy creditor of debtor.  The applicant expressed disagreement with the position of the lower courts, which excluded the bankrupt's expensive real estate from the bankruptcy estate: it was a house with an area of   over 300 sq.m., as well as the land plot on which it was located.

The process was initiated by the debtor himself, who, referring to the fact that this was his only housing, asked to exclude it from the bankruptcy estate. The bankruptcy trustee, in turn, announced the need for division of real estate with the allocation to the debtor of an area sufficient for living, as well as an appropriate land plot. The materials were combined and considered by the courts jointly.

However, the servants of Themis did not see economic feasibility in dividing the property, pointing out that this would require additional spending, which would also have to be taken from the bankruptcy estate.

The fact was that the housing was the only one for the debtor, which meant that executive immunity applied to it.

However, the Supreme Court of the Russian Federation did not share this position of colleagues, recalling that not so long ago the Constitutional Court gave clarifications regarding executive immunity. In particular, they pointed out that the very fact that the debtor has only one housing, should not become grounds for satisfying the claim to exclude it from the bankruptcy estate. In each specific case, the courts must examine the circumstances of the case in detail and, if necessary, make a decision to provide the debtor with other housing within the same locality.

Now the case will be reconsidered by first instance, taking into account the clarifications provided by the Supreme Court of the Russian Federation (decision No. 309-ES21-14612 of December 24, 2021 in case № A50-16438 / 2017).