Holding a bankrupt company’s general director to subsidiary liability for more than 12 mln rubles
Kachkin & Partners’ attorneys represented the interests of the owner of a class-A cold-storage warehouse spanning a total area of 32,500 m2 in a dispute with an unscrupulous management company tasked with handling all payments coming from the warehouse’s renters. The firm’s client, Cres Group, had decided to terminate the agency relationship, at which point the management company had refused to transfer the funds due and owing to our client for the use of its premises.
Experts from Kachkin & Partners’ Corporate and Dispute Resolution Practice secured the recovery from the management company of the amounts that it had been wrongfully withholding, plus penalties for overdue payments. The judges dismissed our opponent’s counterclaims seeking the recovery of damages for unilateral termination of the agency agreement.
Unfortunately, the litigation didn’t end there, insofar as enforcement proceedings were unsuccessful in locating debtor assets for the purposes of at least partially satisfying Cres’ claims. The firm’s experts suggested that the client initiate bankruptcy proceedings against the management company, whose scope involved the filing of an application seeking to have the company’s general director held to subsidiary liability. The dispute was complicated by the general director’s arguments to the effect that all of the debtor’s business records had been seized from him by investigative agencies in the course of a search conducted within the scope of a criminal case. This made it significantly more difficult to prove the general director’s fault in the company’s insolvency and failure to discharge the applicable requirements of bankruptcy law.
Judges at the first and appellate instances ruled in favor of the general director. Despite this setback, the cassation court sided with the arguments presented by Kachkin & Partners’ experts to the effect that the lower courts had failed to adequately evaluate the prudence.