As part of the bankruptcy case, the creditor's application about inclusion of RUB 60 million in the register of creditors' claims was satisfied. Despite the fact that KIAP associates consistently insisted that the creditor was affiliated with the debtor and that no evidence existed that the loan was real, the appellate court left the order unchanged.
In the court of appellate instance KIAP team managed to convince the panel of judges that the circumstances of granting the loan had been improperly verified, and the parties were affiliated. The dispute was sent for re-examination.
At the new trial the court of the first instance once again included claims of the affiliated creditor into the register, ignoring instructions of the cassation and arguments of the creditors. However, in the appellate court KIAP associates successfully challenged a substantial body of the creditor's evidence and convinced the panel of judges that the issued order was illegal. The appellate court accepted the argument that the parties were affiliated and no proper evidence of granting the loan existed, reversed the order of the trial court and dismissed the creditor's application. The court of cassation instance accepted the position of the appellate court and left the court order unchanged.
The dispute is noteworthy because, after first reversing and returning the case for re-examination, the trial court continued insisting on its original position.
Thus, based on the outcome of KIAP associates' efforts that lasted two years, the debtor failed to increase the non-arm's length payables by RUB 60 million, while the Firm's principal retained its share in the creditors' register.
To learn the appellate court ruling, which dismissed the application, click here.
The project was completed by Daniil Zherdev, Senior Associate, and Anna Andreyeva, Associate.