THE COURT: AFFILIATION MIGHT CAUSE A CHANGE OF THE INSOLVENCY OFFICER

It is not uncommon for various kinds of affiliation of creditors to be found in relation to debtors in bankruptcy proceedings. The courts are doing their best to prevent this in order to equalize the rights of all participants of the proceedings.

The similar case was considered by the Arbitration Court of the Moscow District in July. The case was an ordinary one: a loan agreement, a court decision on recovery, a bankruptcy petition with a proposal for an insolvency officer.

The court of the first instance and the Court of Appeal did not find any contradictions, initiated a bankruptcy case and approved the proposed insolvency officer.

However, another creditor challenged the court decisions in cassation, pointing out that the creditor was affiliated with the debtor.

Among the arguments there was the fact that the creditor was the only one aware of the debtor's change of residence, and therefore had the opportunity to initiate bankruptcy proceedings first. In addition, during the sale of property, there was an obvious preponderance towards the first creditor, who received more from the bankruptcy estate.

Thus, according to the appealer, the court should also have doubts about the impartiality of the insolvency officer in connection with the affiliation of the creditor. The district court agreed with this position, indicating that the right to choose the candidate for the officer belongs to the court, which is why the latter cannot be bound exclusively by the will of the creditors and has the opportunity to independently choose and appoint the officer.

As a result, the acts of the lower courts were canceled, and the case was sent for reconsideration to the court of the first instance (decision of July 3, 2020 on case No. А40-206936 / 19).