The Supreme Court has published a decision on a dispute for the recovery of damages from a member of a limited liability company (which is excluded from the Unified State Register of Legal Entities as inoperative). Suddenly, the position there is in favor of the Respondent.

Managing partner of RI-Consulting Elena Gladysheva evaluates the position of the Supreme Court. How new is this approach to recovery of damages from owners of liquidated legal entities? Were there similar cases in the Supreme Court Chamber for Commercial Disputes before and how did the Supreme Court resolve the dispute? The advocate also assesses the consequences if this position of the Supreme Court becomes common in practice and the courts will actively apply it.

"In practice, it often happens that the counterparty has been excluded from the Unified State Register of Legal Entities, which gives the creditor the right to apply for subsidiary liability of the debtor's controlling persons responsible for the non-fulfillment of the transaction. But the courts do not always agree with the creditor's position.

The position of the RF Supreme Court reflected in Ruling of the Supreme Court Chamber for Commercial Disputes No. 305-ES22-11632 dated 03.11.2022 is a repetition and consolidation of the previously accepted practice (e.g. Ruling of the Supreme Court Chamber for Commercial Disputes No. 306-ES19-18285 dated 30.01.2022).

As the Supreme Court of the Russian Federation pointed out, the exclusion of the Company from the Unified State Register of Legal Entities by itself, given the various grounds on which it can be done (including failure to submit accounts, lack of cash flow on accounts), the possibility of judicial appeal against the registering authority and the restoration of legal capacity of a legal entity, taking into account the principles of limited liability, protection of the business decision and the inherent risks of business activities, cannot serve as an indisputable proof of the fact that the Company is a legal entity.

Subsidiary liability may be imposed only when a court establishes that the debtor's administrative exclusion from the Unified State Register of Legal Entities and the resulting inability to repay the debt arose in connection with the actions of the persons controlling the company and through their fault as a result of bad faith and (or) unreasonable actions (inaction).

In the commented Ruling, the RF Supreme Court placed an emphasis on the distribution of the burden of proof in a dispute to bring a founder and general director of a liquidated debtor to subsidiary liability, in the context of the rules that are the basis for bringing to subsidiary liability for the obligations of a liquidated debtor.

In particular, the Supreme Court of the Russian Federation pointed out the need to establish the following circumstances of the case at a new hearing to determine the presence / absence of grounds for bringing to subsidiary liability, namely:

- if the creditor has exercised its right to submit an application to the registering authority to suspend the procedure for excluding the inactive legal entity from the register;

- whether the debtor had property at the time of entering into the lease agreement that would allow to make settlements with the creditor, if the legal entity had been terminated through liquidation proceedings;

- whether the debtor had signs of insolvency at the time of the lease agreement;

- if the founder (he is also the general director) of the debtor R.V. Ermolaev contributed to the impossibility to fulfill his obligations to the creditors in the sense of bringing the business entity to the state of objective bankruptcy.

In our opinion, the position of the RF Supreme Court is not aimed at protecting the interests of R.V. Ermolaev, because it only interprets what the courts need to establish and prove to the parties when they reconsider the case for a proper resolution of the dispute," - notes the advocate.

MORE DETAILS IN THE PUBLICATION OF KOMMERSANT

Supreme Court Ruling