The Supreme Court will decide which companies can give money to charity

The Supreme Court of the Russian Federation (SC) will decide whether the company has the right to transfer money to charity in the run-up to bankruptcy and whether the donation can be issued as a loan. Lawyers say that there is no uniform practice on the issue in the courts, but it is necessary to check whether the debtor was solvent at the time of payment, whether he was affiliated with the recipient and what the money was actually spent on. Otherwise, potential bankrupts will constantly withdraw assets under the guise of charity to non-profit organizations (NPOs) controlled by them.

The SC will consider the legality of donations from the future bankrupt. In November 2019, insolvency proceedings were initiated against JSC Production Company Kuzbasstransugol (Moscow). As part of the procedure, the bankruptcy trustee challenged the loan agreement dated October 2018, under which the debtor issued 70 million rubles. charitable foundation “Mirozdanie” (registered at the same address as the bankrupt) at 7.7% per annum for three years. The fund and the debtor’s shareholders objected to these demands. But the arbitration courts of three instances of the Moscow District declared the contract invalid, recovering 81.3 million rubles from the fund.

The court decisions note that the transaction was made “during the period of suspicion” (three years before the start of the bankruptcy case) and can be canceled under Art. 61.2 of the insolvency law, if it caused harm to creditors, which the other party to the transaction knew about. Such awareness is assumed if the counterparty acts as an interested person in relation to the debtor or, for other reasons, could have known about the signs of insolvency. According to the courts, the fund is affiliated with the bankrupt, since the founder of Mirozdaniya is Ridios LLC, which owns a stake in Kuzbasstransugol through other companies: “The ultimate beneficiary of the entire group is Viktor Nusenkis.”

Mr. Nusenkis was born in 1954 in Donetsk. In 1992, he organized the Energo concern, which later became one of the largest coal traders in Ukraine. On the basis of the Kuzbass mines, which were threatened with closure in the 1990s, he created the Zarechnaya Management Company. The mine was declared bankrupt on November 20, 2017. He owned a number of metallurgical assets in the Donbass, now Makeevkoks and the Yasinovka Coke and Chemical Plant are part of the YuGMK Yevgeny Yurchenko. In addition, the businessman was known in the 2010s as an Orthodox philanthropist.

There was an additional agreement to the loan agreement with the fund, which exempted the borrower from returning money if they were spent “for charitable socially significant purposes,” but the courts found such expenses unproven.

In addition, it turned out that six months before the bankruptcy case, in April 2019, Kuzbasstransugol approved the replacement of the debtor on the loan with the Cypriot Trodart Trading Ltd, which is affiliated with one of the shareholders of the bankrupt. The courts regarded the transfer of the debt “as a way to create the appearance of the defendant’s withdrawal from fulfilling obligations under the loan agreement” and “the abuse of rights by Kuzbasstransugol to withdraw an asset.”

Although the loan amount was up to 1% of the book value of assets, then Kuzbasstransugol already had unfulfilled obligations, in particular, Svyaz-Bank demanded 2 billion rubles. The courts decided that the issuance of a loan to an affiliate infringes on the interests of independent creditors.

The Mirozdanie Foundation and a representative of the bankrupt’s shareholders appealed to the Supreme Court, insisting that in fact it was a donation, the conditions for debt forgiveness were met, since the fund transferred all 70 million rubles. for charity in favor of 24 organizations of the Russian Orthodox Church (ROC) and three other NGOs. They also do not agree with the conclusion that the bankrupt is affiliated with the Universe, since Ridios is not part of the fund’s management bodies. The Supreme Court considered the arguments worthy of attention and referred the dispute to the Economic Board, which will consider it on September 21.

“A clash of interests of creditors and recipients of donations in the event of the bankruptcy of a benefactor is almost inevitable, and the SC will have to find a balance in such disputes,” notes Polina Vizgina, a leading lawyer at Gurichev, Malinin and Partners. There is no uniform practice in such cases, lawyers say. According to Case by Case lawyer Yulia Mikhalchuk, any withdrawal of assets on the eve of bankruptcy is “like a red rag for a bull in the eyes of the courts.” Ms. Vizgina clarifies that the courts usually do not cancel donations if “they do not see the goal of harming the interests of creditors.” But this is more likely to apply in cases where the parties are not affiliated, she adds.

In the Kuzbasstransugol case, the scheme is “not so simple and typical,” lawyers say. Perhaps the meaning of the assignment to the Cypriot company was that the parties did not exclude the return of the loan, Yulia Mikhalchuk believes. “Probably, the creators of the scheme wanted to withdraw funds, and then decided that it was better to let the money go to the church, and not to creditors. The question is whether the ROC can serve as a shield that allows you to protect the withdrawal of assets and hide the real goals,” emphasizes Ms. Shamshina, managing partner of K’AMELAWT.

“If the board reclassifies the loan as a donation and leaves it in force, unscrupulous debtors may start to produce such schemes and withdraw property under the guise of charitable purposes,” Mikhalchuk fears. In order to avoid abuse, it is necessary to investigate why this particular fund was chosen and whether the benefactor was solvent at the time of the donation, Ms. Vizgina notes.

In addition, according to Anastasia Shamshina, “it would be logical to involve the recipients of 70 million rubles in the case. and check the nature of spending. So, the lawyer notes, in the case of the Apeks mining and technical company, the courts canceled the charitable transfer of 400 thousand rubles. to a sports club because of affiliation with a debtor and spending money on salaries and tax penalties.

Anna Zanina, Evgeny Zainullin