“Moscow Arbitration Court Identifies Those Responsible for the Bankruptcy of 'Krosna-Bank’” — Anna Volynets for PRObankrotstvo
The Arbitration Court of the Moscow Region examined three disputes regarding holding the former management of Krosna-Bank accountable for driving the credit institution into insolvency.
The Moscow Arbitration Court reviewed three contentious cases as part of the bankruptcy proceedings of Krosna-Bank. In the first case, the bankruptcy trustee sought to recover the bank's losses amounting to 32.8 million rubles jointly and severally from former top managers Andrey Yudin, Elena Dmitrieva, Dmitry Smirnov, Anton Romanovsky, Irina Kosareva, and Yuri Pulints. However, the court denied this claim.
Why It Matters
Anna Volynets, Project Manager and Attorney at Prime Advice Law Offices, noted that the Krosna-Bank bankruptcy case involved disputes over loss recovery and holding the debtor's controlling parties vicariously liable.
The refusal to recover losses from members of the board of directors/executive board, she continued, was thoroughly reasoned by the court. The bankruptcy trustee linked the losses to the allegedly undervalued sale price of the Bank’s claims against one of its borrowers (the claims were secured by a mortgage). The difference between the sale price of the claims and their nominal value was about 40%. However, the court took into account that the borrower was already in bankruptcy at the time of the sale, as well as subsequent developments in the borrower's bankruptcy proceedings — particularly the fact that auctions for the sale of the collateral property were declared unsuccessful multiple times. In a way, Volynets pointed out, the current reality confirmed the reasonableness of the controlling parties' actions at the time they decided to enter into the assignment agreement.