THE SUPREME COURT OF RUSSIA: AFFILIATION WITH DEBTOR CANNOT ENCOURAGE LOWERED CLAIMS

The Supreme Court considered an interesting case that clearly demonstrates several positions of the highest court. The legal situation was as follows: the debtor was declared insolvent by the court, the creditors were included in the register of claims, after which one of the debts, included in the register, was sold under an assignment agreement to a person affiliated with the debtor. The new creditor declared the legal succession.

The courts of the first and appellate instances upheld the application, but the district court rejected it, citing affiliation and compensatory financing.

However, when considering the complaint, the judges of the Supreme Court voiced a number of arguments that would make it possible to carry out legal succession.

Firstly, the Supreme Court consolidated the assertion that the very fact of a creditor's affiliation in bankruptcy is not an independent reason for a refusal to include or lower his or her claims in the list of the creditors’ claims, with the proviso that such a rule concerns civil obligations, but not the corporate ones.

Secondly, compensatory financing of a debtor in case of redemption of his or her debt by an affiliated person from an independent creditor cannot be recognized as such in every case. For example, in a situation, where the debtor has already been declared bankrupt, and the affiliated person buys out one of his or her debts from an independent creditor, there is no need to talk about compensatory financing, and such a claim cannot be downgraded in the list of the creditors’ claims (definition of August 20, 2020 No. 305-ES20-8593).