MFOs do not have the advantages of banks in bankruptcy cases – Kommersant

The Supreme Court of the Russian Federation (SC) refused to equate microfinance organizations (MFOs) with banks in bankruptcy cases. We are talking about whether an MFO or a creditor who has purchased the right of claim from it can file for bankruptcy of the borrower without first borrowing the debt, that is, under an accelerated procedure. Banks and their legal successors have this right.

The Economic Board of the Supreme Court today, November 29, published a decision on the dispute between Lada Invest LLC and individual entrepreneur Dmitry Firsov. The company previously took out a loan from the Fordewind MFO, and Dmitry Firsov bought the rights of claim from the MFO. Later, the individual entrepreneur decided to bankrupt his debtor and went to court for this. But the Arbitration Court of the Moscow Region returned the application to the creditor, indicating that it does not have the right to bankrupt the borrower without a court decision that has entered into force confirming this debt.

However, the appellate court decidedthat MFOs can receive the same benefits, since they also operate under a license from the Central Bank of the Russian Federation. Consequently, the legal successor of the MFO, who bought the rights of claim from it, also may not pre-finance the debt to initiate bankruptcy, the appeal indicated, having opened an insolvency case for the Lada Invest company.

Based on the borrower’s complaint, the dispute was referred to the Economic Collegium of the Supreme Court, which overturned the decision of the appeal court, providing important clarifications for practice. Thus, the board explained that an MFO is not a credit organization, since for this it must have not just permission from the Central Bank, but a license to carry out banking operations. However, Fordewind does not have such a license and its website does not indicate that it conducts banking activities. Consequently, the creditor’s claim, based on a loan agreement with an MFO, “does not allow him to take advantage of the simplified procedure for initiating bankruptcy proceedings” and does not relieve him of the obligation to pre-dispose of the debt.

As a result, the Supreme Court upheld the decision of the trial court. The bankruptcy case of Lada Invest LLC was dismissed.

Anna Zanina