The lion’s share of vicarious liability cases involves nominee directors.
There is a common stereotype among ordinary people and even businessmen: if a director is nominal, he will not bear any responsibility. The courts have quite the opposite opinion.
The Federal Law “On Insolvency (Bankruptcy)” (hereinafter – the Law on Bankruptcy) establishes special conditions, under which the subsidiary responsibility of the nominee can be reduced or reduced to zero. For this purpose it is necessary to:
– Prove that the nominee did not actually exert determinative influence over the company;
– Exclusively disclose the actual director or beneficiary;
– help locate the company’s assets as well as the hidden assets of the true controlling person.
The terms are clear. How to implement?
It’s one thing if the nominee is deeply immersed in the beneficiary’s activities – for example, when a lawyer or accountant who has long served the owner’s interests agrees, for an additional fee, to become the head of the company for a period of time. Such a right-hand man is likely to know a lot of information about the beneficiary’s assets or know people who might have such information.
It is different if a person comes to the position of manager with a manual or semi-manual management by the owner. Yes, such an executive will be aware of all of the company’s business and transactions. But not the fact that he will know where, how and in whose name the beneficiary’s property is registered so that in case of bankruptcy he can foreclose on it.
The situation when the beneficiary deliberately behaves very carefully and secretly is sad. Such a person prefers to give instructions over the phone, the number of which is registered to third parties. Or by e-mail, whose connection with the beneficiary cannot be reliably confirmed. He hides his assets in offshore locations, so that no one knows about them. Most likely, he obtained foreign citizenship in advance, so that the Russian law enforcement agencies would not reach him.
If we talk about real advice for the nominee, then in each case we have to deal with the situation as a tangled ball of yarn.
What can be done?
1. Search the Internet for information about the company itself and the beneficiary. You don’t have to limit yourself to the first two or three pages of search results. The deeper you dig, the more useful information you can find.
2. Locate all of the company’s counterparties. And talk to them. Maybe they can provide useful information, or agree to become witnesses in court. Often the counterparties themselves in courts quite in detail tell who exactly made all the key decisions in the company. This is what happened in the case of the “Trading and Procurement Company “Synergy”.
3. To contact former employees of the company or people who have cooperated with the beneficiary before. (And were offended by him).
Why do people become nominees?
Boss Power.
Some people can’t say no to their boss and agree to take on extra work “on loan.” The authority of management is so strong that the employee does not hesitate to take on the role of the nominee. He may be indignant inwardly, but he cannot express his opinion and say a firm No. I know of cases where a middle manager, a lawyer, and even the nanny of the beneficiary’s child have agreed to such an offer. Time passes, the “new director” is not found, persuasions take another form: “You have nothing to worry about, we will do everything ourselves, just sign a couple of documents. This can go on for years. Everything is done so neatly that when the company goes bankrupt – it looks like the nominee really ran the company: opened a bank account, got digital signatures, signed all the deals, executed documents with employees, filed tax returns.
The credibility of the management is so much pressure, that the employee doesn’t hesitate to take on the role of a nominee
Trust
Often beneficiaries offer to “nominate” their close friends or even relatives. In such situations, unscrupulous beneficiaries press emotions: “Don’t you trust me?”, “Are you denying help to someone close to you?”
The desire to make money.
When a person needs money for treatment or life, he is ready to take literally any job. And the less “dusty” the job, the better. An offer to become a nominee, to do virtually nothing, getting a couple of ten thousand rubles a month for it – what could be more gripping for a person who is in a difficult life situation? By the way, such vacancies are not only passed on by word of mouth, but are also published on popular resources with vacancies.
Inadequate condition.
This is the dirtiest case. In the pursuit of profit, the beneficiaries register companies with marginal people. Often alcohol or drug addicts. To get a penny of money and spend it all on their addictions, they will easily go with you to the notary, to the bank, to the MFC – wherever – and sign all the necessary documents.
All these people have one thing in common: formally they became directors or participants in the company. But in practice none of them makes key decisions independently – they just act as a tool in the dexterous hands of a beneficiary puppeteer. It never removes the guilt completely – one way or another, the nominees become accomplices in causing harm to the creditors. But it is debatable whether they should be brought to subsidiary liability for the whole amount of the debt. What is the use of the court recovering tens of millions from a person who became a nominee due to a dire need of money for medical treatment of a child? Obviously, he is unlikely to be able to repay the entire debt. This sword of Damocles can completely kill the desire to work officially and pay taxes – because half of his salary will be taken from him for debts that do not exist for him.
One way or another, nominees become accomplices in causing harm to creditors.
How will the courts determine the amount of nominee liability? Cases of diminution.
Anticipating the most important and interesting question, I will say right away: no, there is no methodology or detailed explanations on this subject. All we have is a scanty paragraph of the law (p. 11 art. 61.11 of the Law on Insolvency (Bankruptcy) and a long paragraph of the Resolution of the Supreme Court of the RF № 53 “On some issues related to bringing the debtor’s controlling persons to responsibility in bankruptcy”. It does not give any specifics.
Most courts do not bother themselves with an in-depth analysis of the nominee’s behavior and his active actions to seek assets. Most often, the simplest approach is used – to bring all jointly, without reducing the amount of responsibility of the faux-director.
In practice, however, there are exceptions. Sometimes the courts very creatively reduce the amount of liability without going into a detailed explanation. These decisions are somewhere in the middle of the scale between the “intuition” and “inner conviction” points.
Let me give you an example of several cases where the courts have reduced the amount of subsidiary liability of the nominee.
In the Aton case (ruling of the Arbitration Court of the Far Eastern District of 17.01.2019 in case No. A04-2898/2015 ) the courts brought two nominee directors who were put in office after the firing of the real director to subsidiary responsibility of 5%. The director who drove the company into bankruptcy received 36% liability, while the sole participant and the beneficiary each received 100%. Taking into account that the total amount of vicarious liability exceeded 100 million rubles, the share of nominal directors in money terms is quite an impressive sum.
Something similar happened in the Sredneuralsk Metallicheskiy Zavod case: the courts reduced the liability of nominees to 10 percent of the outstanding debts.
Against the background of the described two cases and the ex-head of “NGD-Promservice” (ruling of the Arbitration Court of the Ural district of 25.07.2019 on case № A50-20911/2015 ) was luckier. Courts of three instances positively assessed the disclosure of exclusive information about the actual director and the reasons for assuming the duties of a nominee director: the defendant assumed this role in connection with a serious illness, for the treatment of which money was needed. Subsidiary liability was limited to an upper limit of 30,000 rubles. Against the background of the fact that the courts recovered 3.5 million rubles from the actual director, the amount recovered from the nominal person looks very modest, less than 1% of the total amount.
Similarly, 30,000 rubles were recovered from the former director of “Stroy-Tekhno” (ruling of the Arbitration Court of the Ural district from 24.04.2018 on the case № A60-52633/2015). The judges were caught by several circumstances – the rather young age of the defendant (21 years old at the time of the offense), and the fact that he had a one-year-old child. These circumstances forced him to become a nominee for a small fee in order to be able to feed himself and his family. In percentage terms, the nominee’s vicarious liability was about 0.1%.
Fixing a firm amount of vicarious liability at a negligible ratio to the entire CO is more akin to imposing a fine
Sometimes there are cases in which the courts completely exempt nominees from subsidiary liability. One such example is the VostokTechSnab case (ruling of the Arbitration Court of the Far Eastern District of 11.10.2019 on case No. A51-655/2015). The defendant was not engaged in the activities of the company and did not benefit. In fact, he did not have access to the EDS – it was stored in another company and used by the accountant to sign documents.
Summary
One does not become a nominee from the sweet life. Some are forced to take this step because of the difficult situation in life, when every penny counts and it is difficult to refuse an offer of additional money. Others, by virtue of their psycho-type, cannot say “no” to their superiors and, gritting their teeth, agree to become a director for a while. However, for the courts, such circumstances are not a reason to relieve the nominee of full responsibility. On the contrary, they impose the same requirements as for real directors, and for any mistakes they hold them hugely responsible.
Source: https://probankrotstvo.ru/articles/nominal-nesvoboden-ot-otvetstvennosti-12? utm_source=telegram&utm_medium=messenger&utm_campaign=anons_23_06_22&utm_content=subsidiarka_kdl#