Debts and children – Newspaper Kommersant No. 8 (7453) dated 01/18/2023

The Supreme Court of the Russian Federation (SC) will decide which payments of a bankrupt citizen can be recognized as alimony for the maintenance of a minor child, if there has not been a formal agreement on them. The lower courts decided that in the absence of a written agreement, the money is not considered maintenance payments, but the ex-wife of the bankrupt managed to transfer the case to the Economic Board of the Armed Forces. Lawyers say such disputes are common and courts often side with creditors. But the Sun, experts believe, can move away from a formal approach and change priorities.

The Supreme Court will deal with the validity of payments to the children of a bankrupt citizen. As part of the insolvency case of Vladimir Seregin (declared bankrupt in June 2021), financial manager (FinU) Yulia Pustynnikova challenged payments of 17.86 million rubles that the debtor made in favor of his wife Svetlana from October 2017 to January 2020. According to FinU, the disputed transfers “are made free of charge with the aim of causing harm to creditors and abuse of law.”

In December 2021, the Moscow Arbitration Court satisfied the claim, noting that the marriage between the spouses continued after the formal divorce, that is, the ex-wife was aware of her husband’s insolvency. The argument of Svetlana Seregina, who called the money “alimentary payments for the education and maintenance of a minor daughter”, and the fact that their purpose indicated “a gift to a loved one”, was rejected. The court also noted the absence of an agreement on alimony and their recovery. The appeal agreed with the cassation, adding that there was no evidence that funds were spent specifically on the child.

Svetlana Seregina appealed to the Supreme Court with a request to cancel the judicial acts. According to the applicant, the court did not examine the arguments about the maintenance nature of the payments and the documents confirming the expenditure of money. The absence of a written agreement “is not a basis for releasing the debtor from the obligation to support a minor child and pay alimony,” the complaint says. Also, Ms. Seregina believes that the amount of payments was “necessary to maintain a decent standard of living for the child, meet her reasonable needs for material support” and “approximately corresponded to the amount of alimony” that the court would have collected. On January 13, the case was handed over to the Economic Collegium of the Armed Forces by its chairman, Irina Podnosova. The meeting date has not been set.

The arbitration manager Victoria Tsarevskaya notes that payments in favor of relatives, including children, are found in most bankruptcy cases and “are often clearly overpriced and unreasonable.” Alimony is often used as a means of withdrawing the debtor’s funds in the bankruptcy proceedings of individuals, confirms Elena Gladysheva, managing partner of RI-consulting JSB. According to her, the child support agreement is now “at the peak of popularity” and is in 90% of family disputes and can be “a way of abuse.”

In practice, courts often take the side of creditors even if there is a notarized agreement on alimony, recognizing it as invalid, says Denis Krauyalis, junior partner at Yakovlev and Partners. Payment of alimony in the absence of an agreement is a rarity, Oksana Tumanova, partner of the Knyazev and Partners ICA, adds, the courts usually qualify such transactions as a donation. She emphasizes that “the voluntary payment of child support entails significant risks for both parents in the event of a dispute.”

In the refusal rulings, the Supreme Court previously supported the position of lower courts that in the absence of written confirmation of maintenance obligations, payments for the maintenance of children are not recognized, says Mr. Krauyalis. In cases of challenging maintenance agreements with a bankrupt, the Supreme Court also noted that “the amount of maintenance should not clearly exceed the reasonably sufficient needs of the child,” and “preservation of the previous level of material security, significantly exceeding the norms established by law, cannot be realized at the expense of creditors,” adds Mrs Tsarevsky.

However, the new case, where the applicant is the former spouse of the debtor, may mitigate the practice, lawyers believe. The Supreme Court may form a new approach to alimony, which will not be limited to a formal assessment of the circumstances, Denis Krauyalis believes. According to Alexander Spiridonov, lawyer of KA Delcredere, it is important to check what exactly the money was spent on, the amount and consistency of payments. Also, he says, courts can examine whether child support exceeds the “sufficient needs of the children” and the debtor’s ability to meet obligations without harming creditors.

Ekaterina Volkova, Anna Zanina