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Sergei Bakeshin has provided his comments to Pravo.ru on the problems with guarantees from insolvent companies
Legal website Pravo.ru has published an article titled ‘The Supreme Court will decide the fate of bankrupt guarantors’, which considered the appeal before the Supreme Court by a bank which wished to be included in the register of creditors for an insolvent entity which held a guarantee with the bank.
The appeal of the bank was refused on the basis that the assets of the bankrupt entity on the date that the transaction was entered into was less than the debt being guaranteed, and the bank should have known that the entity was insolvent.
However Nota-Bank did not agree with the court decision. As it turns out, for the claimant the guarantee in dispute was not the only guarantee or collateral for loans, as such the bank counted on payments from all providers. At present, Nota-Bank is itself involved in insolvency proceedings. The Supreme Court heard these arguments and transferred the matter to be considered at a court hearing.
Senior Associate at Maxima Legal, Sergei Bakeshin, Head of the Dispute Resolution Practice, commented on the problems with fictitious guarantees. In Sergei’s opinion, "the issuing of guarantees, including fictitiously and retrospectively, is one of the most straightforward ways to increase indebtedness. You do not have to pay, transfer property and do other things that a court can then check."
For the full version of the article, please click here.
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