THE SUPREME COURT OF RUSSIA: SHAREHOLDER MIGHT CONTEST A TRANSACTION CONCLUDED BY THE BANKRUPT COMPANY

The Economic Board considered an interesting case on the shareholder’s contestation of a transaction for the sale of property concluded by the bankrupt company. At the same time, an agreement was concluded first, and only after that the commercial court declared the company insolvent.

The court of first instance took the side of the shareholder and declared the concluded agreement invalid, while the two subsequent instances rejected his claim, stating that he did not have the statutory right to do so.

When considering the complaint in the Supreme Court, the Economic Board noted that in accordance with the rules of the Civil Code of the Russian Federation and the legislation on joint-stock companies, a shareholder has the right to protect his interest by contesting the transactions concluded by his company in court. In this case, the shareholder who makes such a claim, acts on behalf of his company, and the counterparty to the transaction is the defendant.

In a situation where a company is declared insolvent and the bankruptcy procedure is launched, the law provides for additional grounds for the transaction’s contestation and also defines the circle of persons entitled to do so.

In such a situation, in the opinion of the Supreme Court of the Russian Federation, a shareholder has the right to contest the transaction on general terms, despite the introduction of bankruptcy proceedings against his company.

At the same time, the shareholder's interest aimed at restoring the bankruptcy estate does not contradict the interests of the debtor's creditors or the aims of the bankruptcy proceedings (definition No. 303-ES20-5380 of October 5, 2020).