All creditors unconditionally believe that the debtor took the assets, stole them: “Everything was stolen before we came.”  The debtor unconditionally believes that he did not steal anything, the creditor himself is to blame, and you should have understood in time where you were going.

The old proverb says: “The eyes have seen what the hands did.” This is exactly what we encounter almost all the time. We are not constantly dealing with the entire bankruptcy procedure but only with isolated disputes. This can be observed in all issues of contesting the transaction.

The active growth in the number of bankruptcy cases now sometimes gives a Russian lawyer the right, the opportunity and the field to show his imagination in an amazing way. Everything is becoming more and more interesting in our profession. When we were studying, we were told: "Forget about fantasy, everything is written in the Code.” Now it’s “Forget the Code, it’s all about the Supreme Court’s fantasy.”

At various conferences we discussed the fact that over the last 10 years, bankruptcy is almost always the result of an active corporate conflict. And in actions related to the conflict, there is always a withdrawal of assets either by the debtor or as a result of collusion of creditors.

In our case the client came as late as possible at the bidding stage. It was a wonderful construction business and an amazing construction concept was created. The city of Moscow approved it; it was to be a “garden city”. But approximately in 2016 the partners fell out and one of them went out of business, in 2017 one of the creditors filed for bankruptcy and the partner who had continued the business died. The heiress, his wife, sees that there are not many liabilities accumulated over the history of the bankruptcy proceedings: somewhere around 300-315 million rubles. The assets of the company are worth more than 1.5 billion rubles, of which only a land plot is worth 800 million. And she does not follow this procedure very closely. Then she turns to us because, under circumstances unknown to her, the aforementioned land plots were put up for auction for 250 million rubles.

It turns out that in 2016 the first partner, having left the business, created a company with similar activities. He bought out half of the accounts payable of the former company and initiated bankruptcy proceedings. He appointed his own bankruptcy trustee, brought in an even larger mass of creditors. Then he changed the trustee and at the same time approved the sale of the land plot from an auction at a price 47% below the market price.

We tried to challenge the auction but all three instances said the same thing: “Yes, we can see the misuse, affiliation of creditors, collusion. But why do you care, the bankruptcy procedure is almost over.”

The chairman of the appeal said: “Here is the bankruptcy law. Show me the article and the rule saying that the bankruptcy procedure is aimed at protecting the interests of the beneficiary. Could not you find it? That’s it, thank you, everyone is free, the decision should be upheld.”

The main problem in the practice of asset stripping is the lack of willingness of all courts to deal with the problem. 20 years ago, there was no concept of “judicial practice.”  There were explanations of the Supreme Court but they did not become “a priory” – the courts considered each case individually, specifically, independently. There was no patter. And now this is exactly what happens: they do not look at the withdrawal of assets when it really takes place.

Another thig is if the creditor is the Deposit Insurance Agency (DIA) or the shareholders protection fund and it is claimed that there was a withdrawal of assets. In our practice, there is a diametrically opposite case: Vega Bank, which financed the construction, went bankrupt. The DIA started collecting the used credit line and naturally the construction stopped, nothing was being built. While a new investor was found, the cost of housing increased – and the shareholders were buying apartments for 2 million rubles, and no one cared that it was already one room instead of a two-room apartment.

Now criminal proceedings have been instituted against the beneficiary of the business. Economic and accounting expertise has established that not a single ruble was withdrawn from the company, everything was spent on construction. Gosstroynadzor audited the expenses every year and there was no evidence of the assets having been withdrawn. But the court decided that the assets had been withdraw and there were grounds to bring the company to subsidiary liability. And although there is an expertise conclusion, but since the fund for the protection of shareholders says that the withdrawal of assets was, so it was.

And these patterns are a big problem not just for the professional community.

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