Sergei Bakeshin commented to DP on the attempt of a bankrupt company to recover lost profits from a counterparty

“Intarsia” LLC, a major player in the restoration market that has been declared bankrupt, is trying to recover about RUB 900 mn from “Niforno-Invest” LLC over a project implemented by the parties in the 2010s. An investment agreement was concluded between the companies, which resulted in a property complex for construction and restoration works. The ownership rights to the buildings and land were subsequently registered for “Niforno-Invest”, while “Intarsia” acted as a tenant of part of the premises. During the bankruptcy proceedings of the restoration company, this investment agreement was declared invalid and the property complex was returned to Intarsiya’s bankruptcy estate. According to experts, the RUB 900 mn claimed by the plaintiff is a loss of profit in the form of lost income from leasing out the complex.

“If “Intarsia”‘s title has not yet been registered, the claim for recovery of lost profits can be made for the period from the moment of registration of “Niforno-Invest”‘s title to the moment of future registration of “Intarsia”‘s title,” Sergei Bakeshin, Counsel, Head of Dispute Resolution and Insolvency Practice at Maxima Legal, explained to Delovoy Petersburg.

According to the expert, recovery of lost profits in the form of unearned income from the use of property returned to the plaintiff as a result of invalidation of the transaction is not a widespread practice, but it still exists. “The difficulty of its application is due to the fact that the courts are not very willing to recover lost profits, usually considering that the plaintiff has not proved its existence and size,” Sergei emphasised.

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