The Supreme Court will determine the grounds for the removal of arbitration managers

The Supreme Court of the Russian Federation (SC) will decide whether “reasonable doubts” about its impartiality are sufficient to remove an arbitration manager (AC) or evidence of its affiliation with the debtor is needed. Creditor banks believe that the debtor and the manager are affiliated, among other things, because their interests were represented at different times by the same lawyers. The district cassation considered that this was not enough, but now the dispute has been transferred to the Economic Collegium of the Armed Forces. Lawyers believe that a wide range of circumstantial circumstances must be taken into account in order to decide on the bias of the AC.

As part of the bankruptcy case of the IT integrator RedSys LLC, initiated in 2020 at the request of Gefest Holding LLC (in October 2021 it was replaced by AKS Company JSC), the Supreme Court will consider the conditions for the removal of the AC.

In 2015-2018, RedSys was a major IT partner of the Pension Fund of the Russian Federation (PFR), supplying computers, data storage systems, server and network equipment worth billions of rubles a year. The rise of the company, controlled by Vasily Vasin, was explained on the market by its connections with the then co-owners of Promsvyazbank and Technoserv, Alexei and Dmitry Ananyev. Now persons associated with Redsys are accused of giving bribes to top managers of the Pension Fund (see Kommersant of December 12, 2022). A criminal case was initiated against Mr. Vasin for concealing the company’s money, but in May it was terminated due to the voluntary payment of 7.2 million rubles. tax arrears (see Kommersant of May 2).

The Arbitration Court of St. Petersburg and the Leningrad Region in September 2022 declared RedSys insolvent, approving Mikhail Yasenkov as the manager. Choosing an AC, the court proceeded from its compliance with the requirements of the law and the decision of the meeting of creditors who voted for his candidacy. The arguments of the banks (they were not yet included in the register of creditors) that asked for a random selection of ASs were rejected.

Then, following a complaint from BM Bank, the appeal overturned the decision regarding the choice of AC, seeing signs of his interest “in connection with the representation of the interests of Mr. Yasenkov, the debtor and the beneficiary of the debtor, by the same group of persons.”

So, the decision says, the owner of the ACC (creditor) Vyacheslav Efimenko represents the interests of the debtor and its beneficiary Vasily Vasin, and previously represented another AC, Pavel Novikov, in court. The latter and Mikhail Yasenkov act as partners of the law firm LLC “Legal Technologies and Consulting”, and the wife of Mr. Yasenkov owns 33.33% in it. In addition, Mikhail Yasenkov in the RedSys case is represented by the same lawyer who also represents Pavel Novikov’s AC.

The appeal also took into account the argument that AKS paid off the debts of RedSys to other creditors who were trying to initiate bankruptcy. According to the bank, this was done to approve the AS of Mikhail Yasenkov. Thus, the court decided, “there were grounds for an alternative choice of the SRO and the manager.” But the district cassation did not agree with this, considering that the representation of the interests of two managers by one lawyer at different periods of time “is not enough for conclusions about affiliation.”

Creditors BM-Bank, Promsvyazbank and Trust Bank complained to the Supreme Court, insisting that “there is no need to prove the direct affiliation of the manager with the debtor or creditor.” In their opinion, the available information confirming “reasonable doubts about the independence of the AC” is sufficient to reject his candidacy. The decision of the meeting of creditors “does not eliminate doubts” about the independence of the AC, and at the time of its holding, the claims of Trust and BM Bank for more than 6 billion rubles were not included in the register. Based on these arguments, the case was referred to the Supreme Court, the consideration will take place on August 21.

Case by Case lawyer Yulia Mikhalchuk explains that the rules for choosing an AC are designed to ensure that the procedure is conducted by “an independent person who will not play along with the debtor, top managers and owners, and also act solely in the interests of one or more creditors.” A balance is needed here so that there is no “assistance in intercepting control over the procedure by those who brought the company to bankruptcy, and the claims of creditors were repaid fairly.”

Tatiana Makarenko, leading lawyer at Gurichev, Malinin & Partners, believes that “high requirements should be applied to the independence of the AC, excluding any doubts about impartiality.” According to her, courts usually take into account “the argument of the presence of common representatives as evidence of actual affiliation, since this can hardly be called a mere coincidence.”

Meanwhile, Valeria Gerasimenko, Chairman of the Council of the Union of Autonomous Organization SRO “Northern Capital”, emphasizes that “the turnover of lawyers” is expressed in the bankruptcy market, therefore, the mere fact of the coincidence of a representative of two persons in different periods “cannot unambiguously indicate affiliation”.

AU Pavel Zamalaev agrees that there is little coincidence of representation. However, he clarifies, the cassation “loses sight” of a number of other circumstances, including “successive repayment of the applicants’ claims by the same company, delaying the consideration of the claims of majority creditors.” Under such circumstances, “it is appropriate to speak of a de facto affiliation” and a “fairly requested replacement of the manager,” the AU believes. As Ms. Gerasimenko notes, doubts about the independence of the AC can also be justified by other “events around the bankrupt”, including criminal cases.

At the same time, Pavel Zamalaev warns, if the Supreme Court supports the creditors’ arguments, there is a risk that the courts will apply this position “formally and release the AC from obligations even in the event of a simple coincidence of representation.” In this regard, he and Valery Gerasimenko urge to evaluate each situation individually, “taking into account the totality of circumstantial evidence of a conflict of interest.”

Ekaterina Volkova, Anna Zanina