The Supreme Court of the Russian Federation indicated who can be considered a developer in bankruptcy

The Supreme Court considered the case, in which the question arose whether a debtor who does not have a registered ownership right to either a land plot or a construction object can be attributed to the number of developers. The courts of three instances considered that no, but the economic board took a different position.

One of the creditors of the company, which undertook to build a house and transfer ownership of the apartments located in it, appealed to the court with a demand to declare the company bankrupt. He explained that he paid the money as part of an equity participation agreement in the construction and believes that the company needs to apply the rules on the bankruptcy of the developer.

However, three instances disagreed with him, indicating that in accordance with the provisions of the Urban Planning Code, the debtor cannot be considered a developer: he does not own either the construction object or the land under it.

The Supreme Court of the Russian Federation, in turn, noted that the concept of "developer", fixed in the bankruptcy legislation, is broader than the definition given by the Urban Planning Code. The specifics of the legal relations that develop between a bankrupt developer and a shareholder are aimed at protecting the interests of the latter. Thus, the rules provided for in paragraph 7 of Chapter IX of the Insolvency Law should be applied to such legal relations regardless of whether the debtor has rights to the land plot and the construction object or not (definition No. 310-ES22-1867 of June 10, 2022 in case No. A54-4244/2018).