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Seven Notes of Bankruptcy for a Creditor
Bankruptcy is primarily a way of collecting debts, a fair distribution of the debtor's insufficient property among his creditors. However, the good idea of a fair distribution is sometimes difficult to implement in the current realities of the bankruptcy process.
This is due to the opposite interests of the main participants in the bankruptcy theater of operations - often the "debtor" manager, creditors, "pulling the blanket" on themselves, and the tax authority, which has complete hegemony in the bankruptcy case. What can a creditor do in such conditions in order to receive his money from the debtor and not remain defenseless in a bankruptcy case?
One man in the field
It often happens that by the time the creditors decide to bankrupt their debtor, there is nothing of value left on it - the assets have been safely withdrawn, the documents have been destroyed, the head has been replaced.
In such a situation, the creditor's most effective tool in a bankruptcy case is challenging the debtor's transactions and collecting debts from controlling persons (losses, subsidiary liability). All this is necessary in order to return the previously illegally withdrawn property, or to shift the property losses of the debtor to the persons who led him and led the company to a state of bankruptcy.
The creditor has the right to independently, without waiting for the actions of the manager, file an application for bringing former managers to subsidiary liability or for the recovery of losses from them. Also, in the course of bankruptcy proceedings, the creditor has the right to file applications for the recognition of the debtor's transactions as invalid, the return of property to the bankruptcy estate. However, in order to submit such applications, it is necessary that the creditor has claims against the debtor amounting to 10% or more of the amount of all claims included in the register of creditors' claims.
The bankruptcy law in this part is aimed at preventing chaos in the bankruptcy procedure caused by the filing of numerous separate applications from each creditor.
If you hit the road with a friend ...
Creditors with claims against the debtor for small amounts should also not let the bankruptcy case take its course and despair. In this case, a little legal "life hack" will help. In order to file an application to contest a transaction, several creditors may combine their efforts so that the amount of their claims amounts to 10% or more of the size of the register of creditors. That is, even creditors with "insignificant" claims from the total size of the register, having united, can represent a significant force in a bankruptcy case.
We should also not forget about such a player in the bankruptcy field as a tax authority. The possibility of obtaining evidence from the tax authority is immeasurably greater than that of an ordinary creditor. And the arguments of the tax authorities in bankruptcy cases in practice have more weight than the position of other creditors. So why should the authorized body not support your application or provide separate evidence, motivating this with a greater likelihood of replenishing the bankruptcy estate and the budget? Practice shows the effectiveness of such cooperation.
Arbitration VS Manager
The key figure in bankruptcy confrontation is the arbitration manager, the effectiveness of which largely depends on the effectiveness of meeting the requirements of an individual creditor.
The manager is obliged to act reasonably and in good faith. And if the manager is seen in the improper performance of his duties, his actions or inaction can be appealed.
However, the creditor should not expect that the manager pursues exclusively "pro-creditor" goals. The law forces the manager to balance the opposing interests of the debtor and creditors, forcing him to act both as an effective manager and as an arbitrator, resolving disputes with creditors.
The key to the success of a creditor in a bankruptcy case is active interaction with the manager. The creditor should establish a constant exchange of information with the manager, find out his position on a particular issue, demand the implementation of actions prescribed by law.
The manager is not entitled to ignore the written request of the creditor. Refusal to fulfill the creditor's claim must be justified and motivated.
The unshakable will of the assembly
In addition to the one-on-one interaction between the creditor and the manager, creditors have the right to express their will to file any applications in the bankruptcy case at any meeting of the debtor's creditors.
If the meeting decides to file an application, for example, to bring the former director to subsidiary liability, the manager has no right not to file such an application with the court , he is bound by the will of the meeting of creditors. At the same time, creditors have the right to expect that the manager will apply to the court with an application as soon as possible after the meeting, within a reasonable time necessary to prepare the application and documents for it.
If the wait is prolonged, the creditor does not need to appeal against the inaction of the manager, enter into correspondence with him again or take any other actions.
It is sufficient to elect a representative of the creditors' meeting at the same meeting of creditors that decided to submit the application. And in case of failure to file an application by the manager, the representative of the meeting of creditors has the right to independently submit such an application to the court. In this case, it does not matter what the share of claims in the register is with this particular creditor.
Friends are known in the registry
Perhaps the most common abuse in bankruptcy cases is the seizure of control over the bankruptcy proceedings through the inclusion in the register of claims of creditors controlled by the debtor. Such a “blurring” of the register is necessary in order for the meeting of creditors to have the required majority of votes.
Claims of “one-day firms”, claims that were repaid by third parties, claims for which the limitation period was missed, claims of “friendly” creditors, etc. are used.
Of course, the creditor should not stop only at the fact that he has included his claims in the register, he should reasonably take care that nothing superfluous gets into the register. Therefore, creditors have the right to object to the claims filed by other creditors, appeal against judicial acts on the establishment of the claims of such suspicious creditors to the register, as well as judicial acts issued in a general suit on the recovery of debts from a bankrupt.
Creditors' claims are considered by the court in parallel, each in a separate dispute in a bankruptcy case. If the creditor waits until the court places his claims in the register, he may miss the deadline for appealing judicial acts in favor of suspicious creditors.
Therefore, for the purposes of filing objections to inclusion in the register, all persons who have filed their claims against the debtor in the bankruptcy case are already recognized as creditors and their claims are accepted for consideration. That is, from the moment when the court made a decision on accepting the application for consideration, the creditor can already become “harmful” and raise objections against any other creditor of the debtor.
At the same time, the creditor is not required to prove the fictitiousness of the claims of the "false creditor", but only to state reasonable doubts about their validity. In this case, the creditor suspected of abuse must provide additional evidence of the reality of his claims, dispel all doubts about the validity of the debt.
This right is often used by the tax authorities, presenting audit materials and data from registers and databases of the Federal Tax Service of the Russian Federation, proving that the creditor did not supply and could not supply goods to the debtor, the creditor's claims were not reflected in his financial statements, etc. But there is nothing to prevent any other creditors from adopting this effective strategy of not allowing them to take control of the bankruptcy proceedings.
Captured by the creditor
Everyone knows that the debts of a bankrupt company can be collected from former directors, chief accountants, company participants and business beneficiaries.
However, creditors should also not forget that losses can also be recovered from the arbitration manager for his illegal actions. To start the process of such recovery, there is no requirement for a mandatory preliminary appeal of his actions or inaction. However, the presence of a judicial act on the illegal behavior of the manager greatly facilitates the task of the creditor.
In what cases can the manager be held liable for his actions? For example, in the bankruptcy procedure, several managers were replaced, and during the transfer of powers, the former manager did not transfer the debtor's documents to the new one, which led to the impossibility of collecting receivables.
Or, due to the inaction of the manager, the limitation period for collecting the bankrupt's receivables was missed. The manager is also unlucky if, due to failure to take measures to preserve the debtor's property, it was destroyed, stolen, etc.
Situations can be completely different, abuses in bankruptcy cases take a wide variety of forms.
The recovery of damages is often preceded by the filing of numerous complaints against the actions (inaction) of the manager. The creditor will not get better from the very fact of bringing the manager to administrative responsibility based on the results of consideration of his complaint. However, the commission of an offense by the manager again may result in his disqualification, which will allow the creditor to change the manager who improperly performs his duties.
First among equals
Quite a few the issue of primacy when filing an application for declaring a debtor bankrupt is also important. If the creditor managed to file a bankruptcy petition ahead of the debtor, then he has every chance to establish in the procedure a manager who, in his opinion, will valiantly return assets, hold directors liable and fairly settle accounts with the debtor's creditors. Therefore, the issue of timely initiation of bankruptcy proceedings for the creditor is often half the success.
As you can see, the possibilities of a creditor in bankruptcy are extensive, you just need to know how to use them. Otherwise, the creditor runs the risk of simply losing his money, perhaps even financing the bankruptcy procedure, and in the meantime, the debtor's assets will be taken away from under his nose, the bankruptcy estate will be divided among persons affiliated with the debtor.
Only a professional approach and understanding of the principles and mechanisms of bankruptcy can protect the interests of the creditor. Don't let things go by themselves.
