The appellate and district courts questioned the legality of an assignment on the eve of bankruptcy. A separate dispute within the bankruptcy reached the Supreme Court, which concluded that there were no grounds for declaring the transaction invalid.

SpetsNefteTrans owed 985 million rubles, so Novozybkovsk Machine-Building Plant vouched for it. Since the debtor failed to fulfill its obligations in full and went bankrupt, the creditor obtained debt repayment from the guarantor who received its rights of claim against the initial debtor under the assignment agreement. However, Novozybkovsk Machine-Building Plant itself had been declared bankrupt, and its bankruptcy trustee demanded that the assignment agreement should be declared an invalid transaction. The Supreme Court overturned the acts of the appellate and district courts, and upheld the ruling of the Arbitration Court of Bryansk Region (case A09-12768/2018).

Elena Gladysheva, Advocate, Managing Partner of RI-Consulting, in her comment to the publication pointed out that the legislation and law-enforcement practice has developed an approach that in case of failure to prove at least one of the circumstances specified in Clause 2, Article 61.2 of the Bankruptcy Law the court shall dismiss the transaction as invalid on this ground.

In the case at hand the Supreme Court assessed the evidence presented in the case file, noting that the claimant had not proved the circumstances indicating that the debtor had been harmed. The absence of such evidence is in itself a basis for refusing to satisfy the claim under the rules of Clause 2, Article 61.2 of the Bankruptcy Law.

In addition, the Supreme Court pointed out that the debtor and SpetsNefteTrans LLC were affiliated, which was confirmed by the debtor issuing a surety for the performance of obligations by SpetsNefteTrans LLC to Modum-Trans LLC under the settlement agreement and common economic interests.

Elena Gladysheva noted that the Supreme Court in assessing this fact gave very important and often non-obvious to the lower courts explanations that for the purposes of invalidating the transaction on this basis it is necessary to prove the totality of conditions:

- the purpose of the transaction to cause harm,

- the parties' awareness of the purpose of the transaction,

- the harm caused by the transaction to the creditors.

If an applicant fails to prove even one of the facts, the others are of absolutely no importance for the purposes of the challenge.

Courts of lower instances often ignore these explanations, in fact presuming that if there is affiliation of even some parties to the transaction, the other criteria for invalidation of the transaction may not be properly proved. The ruling is interesting because, as a rule, assignment agreements often qualify transactions as void if they are aimed at withdrawal of liquid assets - money aimed at inflicting damage to property rights of creditors. Nevertheless, the ruling of the Supreme Court of the Russian Federation only once again confirms the existing judicial practice and is aimed at eliminating the formal approach to the consideration of applications for contesting transactions, the need to prove all the claimed circumstances.

You can learn more about the background of the case and the lawyer's opinion in the publication