One debt, two enforcement orders: how to recover damages from the company and director. Case study, case №А56-12248/2013

5 august 2018

Key matter in dispute: Can one bring ex-director of a bankrupt company to liability for withdrawing money from the company through a sham agreement where an enforcement order already exists with regard to a counterparty under that agreement? Will it constitute double recovery?

BACKGROUND

Bankruptcy manager of Elitehouse managed to have a contractor agreement fictitious under which the company, before its bankruptcy, had paid RUR 12.1 million to GammaStroyProect. However, actual recovery from the 'contractor’ turned out complicated, and the manager decided to file a claim against former CEO of Elitehouse – Daniil Kharitonov – signatory to the fictitious agreement.

RULINGS BY COURTS OF THREE LEVELS

Courts rejected the claims against ex-director. Enforcement proceedings with regard to the fictitious contractor are pending, which means that there still are chances to recover the money. Moreover, cl. 8 of the ruling by Plenum of the Supreme Arbitrazh Court of 30 July 2013 №62 requires that a claim against director be rejected if the company managed to recover the damages otherwise.

RULING BY SUPREME COURT

The court stated that enforcement itself cannot be equated to receipt of money. This does not contradict with cl. 8 of the Ruling by Plenum of the Supreme Arbitrazh Court №62 which deals with actual debt recovery by other means. Since it did not happen, damages may be recovered from director.

OUTCOME

Ex-director held liable.

COMMENT BY S&K VERTICAL

Supreme Court's opinion is interesting in that it allows for existence of two parallel enforcement proceedings on debt recovery in favor of the company: directly from the company's counterparty under the contract, and from the company's director in the form of damages. This is absolutely justified since competition of enforcement proceedings alike may arise in other civil-law relations, for example when we deal with restitution and vindication. Besides that, it is the performance itself which is of paramount importance, not judicial act and not enforcement proceedings. Potential risk of double recovery shall not prevent granting claims in cases alike.

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