Supreme Court of Russia resolved the issue with the arrested property of debtor

The highest court considered the case, in which the question about the possibility of excluding the property that was arrested by another court from the bankruptcy estate of debtor was raised.  The Economic Board concluded that it was possible and lawful.

As part of the insolvency case of the company, one of its creditors applied to the court with a demand to exclude the property seized in his favor by a court of general jurisdiction from the bankruptcy estate. The claim was satisfied by the court of first instance. However, the court of appeal and the district court, cancelled the decision, referring to the fact that the property did not belong to the creditor.

The Supreme Court of the Russian Federation supported the decision of the court of first instance, substantiating this by the principle of binding judicial acts.

The issue of legal uncertainty around the property of the debtor-company arose against the background of two cases - a criminal case against an individual controlling this company, and also a civil one on behalf of a creditor. As part of the first, the property of both the defendant and his company was seized. Then, as part of a civil case, after the initiation of enforcement proceedings, the bailiff asked the court to remove the arrest in order to provide the possibility of foreclosure in favor of the creditor. The court allowed this to be done, pointing out that the recovery could be made only in the interests of a particular person.

Then, as part of a bankrupt case of the company, the creditor applied to the arbitration court, asking to exclude the property seized earlier from the bankruptcy estate. Courts of different instances took different positions, but the Supreme Court of the Russian Federation put an end to the case (decision № 308-ES21-26679 of April 20, 2022 in case № A53-24369 / 2019).