The Supreme Court of the Russian Federation (VS) will decide in which case the involvement of the organizer for the bankruptcy auction is justified and whether it is possible to make his remuneration dependent on the sale price of the bankrupt’s property. The lawyers expect the BC to formulate a number of criteria to support the reasonableness of the cost of remuneration for the organizer of the auction. This may affect the fate of electronic platforms for conducting bankrupt trading, which risk losing part of their income.
The VS will consider the case on whether it was necessary to involve the organizer of the auction and pay him a percentage of the sale price of the bankrupt’s property, given that it turned out to be almost 80% lower than the initial cost. The dispute arose within the framework of the bankruptcy of OJSC “Foreign Economic Association” Technopromexport “, which was a structure of Rostec, appeared in the scandalous story with the purchase of Siemens turbines (then ended up in Crimea), in connection with which in August 2017 the company, already being bankrupt, fell under EU sanctions (see Kommersant dated August 4, 2017).
The bankruptcy commissioner (CU) Leonid Lazarenko asked the court to approve LLC Ru-Trade as the organizer of the auction for the sale of the debtor’s property (shares of energy companies) and set his remuneration as a percentage of the actual selling price. In September 2018, the Moscow Arbitration Court refused the manager, explaining the refusal by the fact that he had not confirmed the need to attract persons for this work, and the cost limit could be increased only by a “hard sum”. Without waiting for the court to consider increasing the limit, Mr. Lazarenko entered into an agreement with Ru-Trade to hold the company for bankruptcy trading. In May 2020, the manager appealed to the court with a request to establish a remuneration for the LLC in the amount of 22.35 million rubles. (1.5% of the sale price), citing the fact that Ru-Trade has already organized and held the auction, and the meeting of creditors in July 2018 agreed to increase the spending limit.
This time, the court of first instance in August 2020 satisfied the statement of the CU, the appeal and cassation upheld this decision. The courts found that Ru-Trade actually organized the auction, selling 44.9% of the shares of Sitienergo LLC and 100% of the shares of TPE-City for 1.47 billion rubles.
According to the courts, the involvement of the organizer was justified, since potential buyers needed special knowledge in the field of energy in order to give advice, and it was thanks to the professionalism of Ru-Trade that it was possible to sell the property.
At the same time, the meeting of creditors approved the costs of the organizer of the auction, and the cost of services is not overstated, the courts decided.
The lender of the bankrupt corporation “Corporation of the joint-stock company” Electrosevkavmontazh “” did not agree with the separation of these expenses from the bankruptcy estate and achieved the transfer of the case to the economic board of the Armed Forces. In his opinion, the amount of remuneration for the organizer of the auction is overstated, since it does not correlate with the volume and complexity of the work done. Moreover, the applicant points out that there was no need to involve Ru-Trade in principle, and the disputed property was sold 79.3% cheaper than the initial selling price determined by the appraiser.
Such disputes arise regularly, since creditors are always interested in keeping costs as low as possible, and KU is interested in the effective fulfillment of obligations, which requires certain costs, says Alexander Zablotskis, chairman of the A1 Bar Association.
According to him, abuses in the form of overstating the costs of the organizer happen in practice, so the lawyer expects that the Supreme Court will formulate a number of criteria to determine the need to attract the organizer of the auction and the amount of his remuneration.
“In each specific case, the involvement of the organizer of the auction should be decided individually. It is justified, for example, in the presence of a large number of lots, a significant load of the corporate governance, the exclusivity of the property being sold, ”says Valeria Tikhonova, a lawyer at Vegas Lex. She believes that in this case there is no convincing evidence that the auction was successful precisely due to the actions of the organizer. Ivan Stasyuk, an advisor to the law firm RKT, believes that in order to establish the percentage remuneration, it is necessary that the organizer of the auction go beyond ordinary actions, for example, achieve the sale of a specific asset, negotiate. “In this case, the courts seem to have taken this into account, noting that shares of companies operating in the energy market were being sold. But it is unclear whether these arguments will convince the Armed Forces, ”he clarifies.
Ms Tikhonova also questions the good faith and reasonableness of the KU, which was refused by the court to increase the limits, but still attracted the organizer on controversial terms. “The involvement of the organizer can be criticized if the manager could have performed these actions himself,” Ivan Stasyuk agrees. In his opinion, if the Supreme Court cancels judicial acts on the grounds of the inadmissibility of interest remuneration, then this may lead to the exclusion of such a method of payment for the organizer’s services, or each time it will be necessary to justify their extraordinary nature.
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