Sergey Bakeshin has explained to Noviy Prospekt the risks to close relatives of insolvent individuals

Sergei Bakeshin Senior Associate

Administrators for bankrupt former billionaire Andrey Asayev have filed a claim for the bankruptcy of his daughter. The court previously ruled that a transaction to transfer a land plot and cottage to the wife and daughter of the businessman was ineffective and since the recovery of the land plot is not possible, awarded financial compensation.

According to Head of the Dispute Resolution and Insolvency Practice at Maxima Legal, Sergey Bakeshin, family bankruptcies are an increasing trend.

“Firstly the banks sometime seeks guarantees not only from the owners of businesses but also from their spouses. If a loan cannot be returned, risk of bankruptcy can apply to both. Secondly, according to bankruptcy law, a wide range of relatives can be found to be connected individuals in respect of an individual or legal entity. It can be reasoned that connected individuals know about the financial difficulties of family members, therefore such transactions can be challenged. Nevertheless it may be not only a dishonest transfer of a debtor’s assets but also an ordinary transaction. If the property is not effectively transferred, cannot be returned to part of the bankrupt’s assets, then parties to the transaction can be threatened with bankruptcy. Thirdly, relatives of a debtor or manager of a debtor-company can be ruled to be controlling individuals and incur subsidiary liability”, explained Sergey to Noviy Prospekt.

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