On April 21, 2016, the Judicial Collegium for Economic Disputes of the Supreme Court of the Russian Federation (hereinafter referred to as the Judicial Collegium of the Supreme Court of the Russian Federation) issued an interesting ruling regarding subsidiary liability in bankruptcy (case No. 302-ES14-1472).
Brief plot of the case: as part of bankruptcy proceedings, the bankruptcy trustee filed an application to bring to subsidiary liability the former manager, as well as the limited liability company, which was the founder of the debtor.
The plaintiff’s application was satisfied by the rulings of the first and appellate instances. The cassation court sent the case for a new trial to the court of first instance, where the plaintiff’s application was granted in terms of bringing the debtor’s manager to subsidiary liability, and in terms of bringing the company as the sole founder, it was denied.
The Federal Tax Service of the Russian Federation filed a cassation appeal with the Supreme Court of the Russian Federation and asked to cancel these acts regarding the refusal to bring the company to subsidiary liability.
The Judicial Collegium of the Supreme Court of the Russian Federation overturned the decisions of the lower courts regarding the refusal to satisfy the requirements of the company – the only participant, pointing out that the Civil Code of the Russian Federation (hereinafter referred to as the Civil Code of the Russian Federation) and federal laws establish the rule on subsidiary liability of a participant who has the right to give instructions mandatory for the debtor or otherwise has the opportunity to determine the actions of the organization, in a situation where the insolvency (bankruptcy) of a business company is caused by such a participant and the property of the legal entity is not enough for carrying out settlements with creditors.
The court emphasized that in order to impose subsidiary liability, there must be a cause-and-effect relationship between the use of one’s rights in relation to the controlled entity and the totality of legally significant actions committed by the controlled organization. Subsidiary liability