SergeI Bakeshin has commented for Pravo.ru on the case pending before the Supreme Court of the Russian Federation regarding settlements between two bankrupt companies

The Supreme Court of the Russian Federation will decide how the bankrupt Novoorlovskiy Mining and Processing Combine should return more than RUB 120 million paid under a recognized void transaction to Rostovskiy Electrometallurgical Plant, which was also declared insolvent. The lower courts have ruled that since the combine itself is going through bankruptcy proceedings, the inclusion of the plant’s claim in the register of creditors of the combine can be considered as the return of funds. However, in the debtor’s opinion, inclusion on the register along with the independent creditors is erroneous. In this case the combine, being on the register of an affiliated debtor, may receive the satisfaction of the claim without returning the money received under the invalid transaction to the latter.

Sergei Bakeshin, Senior Associate, Head of Dispute Resolution & Insolvency practice at Maxima Legal explained to Pravo.ru that if the combine’s claim is recognized groundless or is left without consideration, it will subsequently encounter difficulties with inclusion of the combine in the creditor register (it may be denied or its claim will be downgraded due to an missed deadline). According to the expert, this may result in infringement of the rights of the plant’s creditors. Sergei noted that the situation may be resolved by recognizing the mill’s claim to be justified to the extent to which the mill will return the funds to the bankruptcy estate of the mill.

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