BANKRUPT DIRECTOR WILL PAY FOR WITHDRAWAL OF FUNDS TO “ONE-DAY COMPANIES” WITH LOSSES

In a bankruptcy case (No. A73-14984/20), the bankruptcy trustee and the tax authorities filed claims with the court to recover from the debtor’s former director losses incurred as a result of the bankrupt’s withdrawal of funds to “one-day firms”.

The courts of the first and appellate instances partially agreed with the arguments of the applications, noting the following:

The unlawful nature of the debtor’s activities under the defendant’s leadership was established by a tax audit, the results of which were recognized as reliable. The defendant intentionally (or at least without due care and diligence) carried out a formal document turnover with “one-day firms”, which had neither labor nor material resources necessary for the fulfillment of obligations under the contracts. The withdrawn funds were subsequently cashed in. The main purpose of the deed was the unjustified seizure of money from the debtor. This resulted in losses for the debtor and, consequently, for its creditors, with whom it was unable to pay its obligations.

The debtor, acting under the direction of the defendant, committed unlawful acts as a taxpayer aimed at obtaining an unjustified tax benefit. These unlawful actions could not have been committed without the manager’s will to commit them and were purposeful in nature. The defendant could not have been unaware of the fictitious nature of business transactions, where there was no counter-provision in favor of the debtor.

The cassation court did not share this approach, pointing out that, according to the conclusions of the tax audit, the debtor worked with “one-day firms”, carrying out a formal document flow in order to obtain an unjustified tax benefit through the unlawful use of VAT deductions. However, these findings are insufficient to impute liability in the form of losses, since the obligations under the contracts have been fulfilled. The claims could have been satisfied in a situation where the funds received under the municipal contracts were not used to fulfill the debtor’s obligations, but were actually withdrawn from the debtor’s accounts by its manager, which would have caused negative consequences for the debtor in the form of an increase in accounts payable due to non-fulfillment of contractual terms.

In rejecting the tax authorities’ arguments that the work had actually been performed by the debtor itself or by other contractors, the court pointed out that they showed that the disputed counterparties had actually been used by the defendant to cash out funds, while the tax authorities pointed to the opposite – the defendant’s unjustified misappropriation of the disputed sums of money.

The court found that the totality of the circumstances necessary to bring the defendant to liability in the form of recovery of losses had not been proved, since the obligations under the municipal contracts had been fulfilled and paid in full, and the creation of a formal document flow involving fictitious organizations in order to obtain an unjustified tax benefit did not indicate the withdrawal of the debtor’s funds.

The Supreme Court (SC) of the Russian Federation referred the tax authorities’ complaint to a panel for consideration, reflecting the following arguments in its ruling:

The applicant insisted that the circumstances established by the courts of the first and appellate instances were sufficient to qualify what the defendant had done as losses to the debtor and its creditors.

The applicant referred to the proof of the facts that, among other things, formed the basis of the decision to hold the debtor liable for taxation: the work had been performed by the debtor and its real counterparties, but not the legal entities named above; the money had been withdrawn from the accounts without any counterparties; subsequently, the cashed-in funds had not been used for the debtor’s needs or to pay off the debtor’s obligations. The withdrawal of money resulted in the debtor’s insolvency, and its director could not have been unaware of the scheme.

Source: https://rusbankrot.ru/legislative-news/za-vyvod-sredstv-na-odnodnevki-direktor-bankrota-zaplatit-ubytkami/