THE SUPREME COURT OF THE RUSSIAN FEDERATION ADMITTED PROCEDURAL LEGAL SUCCESSION AFTER LIQUIDATION OF LEGAL ENTITY

The Supreme Court of the Russian Federation has recently considered an interesting case of procedural succession in relation to a debtor liquidated in the process of bankruptcy from a liquidated creditor.

The insolvency manager of the creditor, within the framework of the insolvency case of the debtor, applied to the court with a claim for procedural succession in favor of the creditor's participant, to whom the rights of claim, as well as the debts, were transferred.

When considering the application, the courts of three instances did not see the possibility of satisfying the application, referring to the fact that the manager had no right to perform any actions on behalf of the legal entity after its liquidation.

However, the judicial board of the Supreme Court had a different point of view on this matter.

Drawing parallels with the possibility of challenging transactions, concluded by the debtor with third parties and reclaiming the property of an already liquidated debtor, as well as the institution of subsidiary liability of persons controlling the debtor, the Supreme Court of the Russian Federation indicated the possibility of applying, along with the liability of the debtor's participants, their rights for the collection of debts owed to the liquidated legal entity.

Thus, the Supreme Court identified a certain balance of rights and obligations of persons associated with the debtor after the liquidation of the latter (determination No. 302-ES20-9010 (1,2) of September 2, 2020).