Sergei Bakeshin has explained to Novy Prospect why a settlement agreement in a bankruptcy case may be challenged

The Commercial Court of St Petersburg and the Leningrad Region has approved a settlement agreement in the bankruptcy case of Udarnik poultry farm. Its terms can be called favourable for the enterprise: the company will be able to repay  RUB 2.7 bn of debts within 14 years. However, the banks, which are the main creditors of Udarnik poultry farm, still have the opportunity to challenge the settlement agreement.

‘The ruling to approve the settlement agreement can be appealed in a court of cassation within a month from the date of its issuance. Such an appeal may be successful if the settlement agreement contradicts the law or violates the rights of the appellant. For example, if the agreement is clearly unenforceable or if, in the normal course of bankruptcy proceedings, creditors can obtain satisfaction of their claims in a substantially larger volume and in a substantially shorter period of time,’ Sergei Bakeshin, Counsel, Head of Dispute Resolution & Insolvency Practice at Maxima Legal, explained to Novy Prospect.

In addition, according to the expert, an interested party may apply for a review of the determination to approve a settlement agreement on newly discovered circumstances, if they were not known at the time of approval of the document or the person did not participate in the conclusion of the agreement, and his rights are violated. ‘Such an application may be filed within a month from the date of discovery of the circumstances that are the basis for revision of the case,’ Sergei noted.

In addition, Sergei Bakeshin reminded that at the request of one or more creditors who have at least 25% of all claims, the court may terminate the settlement agreement, which is not properly executed.

To read the full article (in Russian), please, see Novy Prospect website >>>