Questionable payments made by a former director: recovery of damages from the company

A company was declared bankrupt on the basis of an application filed by a creditor whose debts had not been repaid. At the same time, the former director of the debtor company was noticed in evading the transfer of inventories and documents relating to the activities of the company to the receiver in bankruptcy. As a result, the latter had questions and made requests to the government authorities and banks for information about director's activities.

The analysis of bank statements from the current accounts of the debtor company revealed a large number of questionable payment transactions made by the former director.

The receiver in bankruptcy filed a lawsuit seeking to recover damages from the former director.

Under what conditions can damages be recovered from the former director?

Case was handled by

In the course of the proceedings, JurInvest specialists established that the former director had made two groups of payments:

- payments from the corporate bank card linked to the company’s current account which were not related to the company's activities (payments in restaurants, grocery stores, clothing stores, payments for entertainments, leisure activities, etc.);

- payments from the company’s current account made to the former director’s account which were not related to the payment of his salary (transfers with no indication of the details of payment, and amounts paid on account).

Eventually, the court of first instance allowed the receiver's petition to hold the former director of the debtor company liable.

The former director elected to appeal against that award in the Court of Appeal. However, the court of appeal confirmed that the damages were awarded legitimately and dismissed the appeal.

More than RUB 6 mln were collected to include in the bankruptcy estate.

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