«Subsidiary Liability: Trends and Contradictions in Court Practice» — Anna Volynets for Delovoy Peterburg
Bankruptcy law is actively evolving, and the institution of subsidiary liability is becoming a key tool for recovering debts from owners or managers of debtor companies.
Experts discussed the latest trends, contradictions in court practice, and defense strategies at a legal forum organized by Delovoy Peterburg.
All participants acknowledged that the increase in statistics of satisfied claims, new Supreme Court rulings, and the economic situation make the topic of bankruptcy more relevant than ever. Issues of creditor liability and subsidiary liability, addressed by the forum speakers, are gaining particular urgency.
Creditor Liability for Debtor Losses
The issue of personal liability of members of creditors' committees and meetings for losses of the debtor company was examined by Anna Volynets, head of projects at Prime Advice Law Offices. She cited a recent Supreme Court ruling, which confirmed that members of a creditors' committee bear personal liability for their decisions, even if they act according to their employer's instructions.
If an employee of an organization receives instructions on how to vote, this does not release them from personal liability,
— emphasized Volynets.
However, to impose liability on the creditor who proposed the candidate for the committee member whose decision led to losses, it is necessary to prove that the former gave the latter direct mandatory instructions.
Furthermore, it must be established that it was precisely the committee's decision that became the primary cause of the losses, and not the subsequent actions of the bankruptcy trustee. In the case reviewed by the Supreme Court, it was the trustee who independently chose an unreliable borrower for the loan, which removed liability from the creditor.
The expert suggested that if the borrower's candidacy had been determined by the creditors' meeting itself, then the creditors who voted for this decision could potentially be held liable. At the same time, a representative voting by proxy and in accordance with their principal's instructions is unlikely to bear personal financial liability.
It would rather be imposed on the principal (creditor) themselves. Although, of course, everything depends on the circumstances of the specific case.