Protection against challenging transactions in bankruptcy
The operations of transport companies (carriers) are often built upon the agency model. Agents sell tickets at bus stations, receive all proceeds and then transfer them to the carrier. Such intermediary receives a fee for the services. What to do if the carrier goes into bankruptcy and the agent's fee is sought to be declared an invalid transaction?
Case was handled by
The carrier was declared bankrupt and the agents' fees were declared invalid. The court satisfied the receiver’s lawsuit and ordered the recovery of RUB 10 mln into the bankruptcy estate. Transactions made six months before the carrier's bankruptcy and after the initiation of bankruptcy proceedings were challenged. The task of the lawyers was: to get the court ruling on challenging the transactions reversed.
The complexity of the case: the lawyers joined the proceedings at the appeal stage only.
The lawyers succeeded in proving that:
1. Our client was not aware of the existence of other prior ranking creditors when making payments.
2. The claims of other creditors were partially settled (and this is important when challenging current payments).
3. The bankruptcy estate included enough assets to settle the claims of prior ranking creditors in the course of settlements.
It took the court of appeal 5 sessions to resolve the dispute. It was an exceptional situation. Normally it takes the court of appeal one short session to consider an appeal which ends up with its dismissal. Eventually, our professionals succeeded in getting the ruling of the court of first instance reversed. The court of appeal dismissed the receiver’s claims in full. The client saved a total of more than RUB 10 mln.