Defense against the recovery of damages from the CG in connection with the Debtor’s uncontested transactions.

Case Background:

The bankruptcy trustee in the Debtor’s bankruptcy case applied for recovery of damages from the bankruptcy trustee, as the latter failed to contest the transactions, which resulted in the loss of replenishment of the bankruptcy estate.

Positions of the courts:

The courts of three instances satisfied the claim.

Courts came to conclusion that inactivity of Arbitration manager in not contesting transactions resulted in loss of possibility to replenish bankruptcy mass with property of Debtor and in this connection they exacted damages in mentioned amount from CG.

The position of the Supreme Court:

The courts actually proceeded from the fact that the disputed transactions would have been declared invalid in any case under special rules of the insolvency law.
However, this conclusion should be recognized as erroneous.

The present bankruptcy case was initiated on 25.04.2016. The disputed pledge agreement and the foreclosure agreement were concluded on 12.01.2015 and 25.06.2015 respectively, i.e. more than six months before the bankruptcy proceedings were initiated. These transactions could not be challenged on the grounds of preferential treatment of the creditor under the rules of Article 61.3 of the ZOB.

The dates of the contracts belong to the periods of suspicion as defined by Article 61.2 of the ZOB. The main feature of the corpus delicti of clauses. 1 and 2 of the said Article is the presence of harm to the bankruptcy estate, i.e. the inconsistency of counter-provisions between the counterparty and the debtor made not in favor of the latter.

The courts found that the seller had transferred the pledged equipment and machinery to the buyer in repayment of the debt from the amount of the unreturned advance payment. The courts did not find that the property transferred by the debtor was worth more than the amount specified. The parties to the case have not substantiated, either, the existence of damage from the disputed transactions. Besides, the fact of monetary funds transfer as an advance payment was not disputed by anybody, the debt on return of the advance payment in the outstanding part is included into the register.

The disputed agreements could not be qualified as having caused damage to the Debtor’s creditors, the transactions lacked the suspiciousness features stipulated by clauses. 1 and 2 of Art. 61.2 of the ZOB.

The CG representative’s reference to the fact that the court ruling of 27.12.2018 actually concluded that the inaction was illegal due to the existence of grounds to recognize the transactions invalid both on the grounds of preference and infliction of harm – is to be rejected. Within the meaning of Art. 69 of the APC RF the arbitration court is not bound by the conclusions of another court on the legal qualification of the considered relations and the interpretation of legal norms. Since the question of recovery of losses from the AA was referred to the court in this separate dispute, it was the question of the presence of a set of conditions necessary for bringing the defendant to civil liability, including the wrongfulness of his actions and the existence of the victim’s losses was to be clarified in the framework of the present dispute. The presence of the mentioned conditions is not confirmed.

The judicial acts were cancelled, the claim for damages was denied.

Source: Determination of 14.06.2022 in case A33-8678/2016 (302-ES21-29794)