Sergei Bakeshin has commented for Novy Prospect on the use of subsidiary liability mechanism against the owner of the St Petersburg meat processing plant

In the summer of 2021, the claims of the bankruptcy trustee to bring Gennady Yemelyanov, owner of the bankrupt meat processing plant Severo-Zapad, to subsidiary liability were satisfied. At the moment the businessman is trying to appeal against the decision. However, taking into account that the dispute is being considered for the second time, chances that the cassation court will side with Mr Yemelyanov are not high.

Sergei Bakeshin, Head of Dispute Resolution and Insolvency Practice at Maxima Legal, has explained to Novy Prospect online publication that subsidiary liability for creditors is one of the few chances to receive at least some satisfaction of their claims (if not financial, then at least moral).

According to Maxima Legal, 4,918 insolvency proceedings were opened in Russia in the first half of 2021. In the same period of time, 3,339 petitions were filed to bring the debtor’s controlling persons to subsidiary liability. 1,641 applications were satisfied, which is almost half of them. “If in 2020, applications to bring a debtor’s controllers to subsidiary liability were satisfied in approximately every fourth bankruptcy case, in the first half of this year – in every third case,” Sergei Bakeshin stressed.

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