The Supreme Court has determined when it is possible to challenge the transaction on bankruptcy grounds
The claimant filed a claim on invalidation of a transaction which, in its opinion, was concluded by the previous management in order to give preference to a specific creditor in the bankruptcy procedure, what served as the ground for its challenge.
It should be noted that in accordance with the Russian legislation in the bankruptcy sphere there are only two grounds of challenging a transaction:
- suspicious transaction;
- purpose of the transaction is to give preference to one of the creditors.
However, the courts of the first instance and the Court of Appeal refused to satisfy the claims, citing the following reasons:
- the financial recovery procedure of the claimant has been effectively terminated;
- solvency has been restored;
- the bank’s management bodies have been formed.
The courts decided that combination of these facts is evidence of the claimant’s inability to refer to bankruptcy grounds when challenging the transaction.
However, the Supreme Court, considering this case in cassation, came to a different conclusion. The Supreme Court considered that these circumstances do not indicate the end of the bank bailout and leave the possibility of challenging transactions on bankruptcy grounds. As a result, the case was sent for a new judicial review.