On the importance of determining the moment of the onset of objective bankruptcy in order to bring the controlling debtor to subsidiary responsibility

Egorov Aleksandr Aleksandrovich Postgraduate student; Faculty of Law; Academy of Labor and Social Relations 305000, Russia, Kursk region, ul. Ufimtseva, 2A advokat-a.egorov@yandex.ru

UDC 347.15

The institution of bankruptcy in the Russian Federation today is a significant aspect of the legal and economic life of society. This state of affairs is determined primarily by the relevance of bankruptcy issues posed in both legal and economic realities. If economic scientists described bankruptcy as a form of development of market relations, then for legal science it is an urgent and expedient issue. The importance of bankruptcy research for jurisprudence can be described in the focus of increasing cases of bankruptcy practice and bankruptcy court proceedings. This sets an academic precedent for his scientific study. First of all, bankruptcy today is an institution that affects a wide range of people, various sectors of the economy and public life. A review of judicial practice in the field of bankruptcy conducted by the Supreme Court of the Russian Federation shows that the overwhelming number of bankruptcy cases end with the debtor being declared bankrupt and, as a result, released from debt obligations [Review of judicial practice in resolving insolvency (bankruptcy) disputes for 2023 // The Supreme Court of the Russian Federation. Moscow, 2024. 68 S. S.2-8].

At the same time, bankruptcy cases of individuals are represented by a relatively small number; bankruptcy cases of legal entities make up a significant part of the legal proceedings. It can be stated that, on the one hand, bankruptcy allows Russian citizens and companies to get rid of their outstanding debts. On the other hand, as emphasized in the above review, bankruptcy is defined in the space of the legal reality of the Russian Federation as a reliable instrument for the legal regulation of civil law relations (Review of judicial practice in resolving disputes on insolvency (bankruptcy) for 2023 // The Supreme Court of the Russian Federation. Moscow, 2024. 68 p., p.53). The problem subsidiary liability becomes the focus of both the regulatory regulation of bankruptcy and the specifics of procedures and practice of legal proceedings in this regard. In particular, the research literature asks the question: what measure of legal responsibility does the controlling person bear in various bankruptcy cases? Today, the analysis of this situation can be recognized as one of the key issues of the legal regulation of bankruptcy and the rule-making process related to the problems of this institution. At the same time, determining the moment of objective bankruptcy in this regard obviously becomes an aspect that allows us to distinguish between both the precedent facts of bankruptcy and the basis for initiating bankruptcy proceedings, which may be related to the social and economic status of the debtor. In this article, on the basis of comparative legal methodology, the issues of determining the moment of the onset of objective bankruptcy are investigated.

It should be clarified that the essence of objective bankruptcy is obviously determined by the presence of components that can be described, evaluated and clearly defined. The moment of the onset of objective bankruptcy is specified based on the distinct characteristics of the dynamics of the debtor's financial and economic condition, therefore, special attention should be paid to the issues of its academic study and the establishment of a time frame. The discussion of bankruptcy in the scientific literature is a combination of several key approaches. On the one hand, researchers postulate the principle that bankruptcy is generally a public practice associated with the administration of legal regulation of economic relations. It is worth noting that in the works of leading scientists on the problems of bankruptcy and its legal regulation – V. V. Vitryansky, V. N. Tkachev, M. V. Telyukina – this issue is investigated from the standpoint of not only the necessity of this institution and its legal essence, but also in the focus of the variety of studies of bankruptcy precedents as a form of market regulation. However, for example, the work of S. V. Petukhov and Yu. V. Racheeva identifies the key economic characteristics of the legal regulation of bankruptcy, as well as its social causes and consequences ^[10]. Yu. E. Monastyrsky defines the problems of bankruptcy in the context of social causality. According to the researcher, bankruptcy is often justified by the debtor's social status, which affects his financial and economic viability and solvency. Pointing out the measure of responsibility of the controlling persons, the researcher, however, emphasizes that this responsibility is fixed through the unwritten relationship between the debtor and the controlling person himself ^{[7, pp.83-84]}. A. P. Gvozdev believes that the controlling persons are within the limits of rather non-contractual responsibility. In particular, the issue of determining the criteria for the debtor's solvency, which is formed as a result of an assessment of his financial and economic condition, cannot be clearly determined by the controlling person ^{[3, p.129]}. Yu. V. Racheeva, considering the responsibility of relatives of the person controlling the debtor, notes that the latter is not responsible for the debtor's performance of credit obligations, which creates a legal conflict. At the same time, the scientist notes that the network of interactions between the debtor and the controlling person, which has social and even psychological grounds and features, forms the very situation of the loan and the distribution of responsibility between its direct and indirect participants ^{[11, pp.65-66]}. On the other hand, a number of studies emphasize the significant degree of subsidiary responsibility of the controlling person, which is determined by Russian law. This approach is presented in the works of O. V. Gutnikov ^[4], Y. Y. Kryuchkova ^[6], H. T. Nasirov ^{[8; 9]} and other researchers. The last author notes that the problems of subsidiary liability form the field for the restoration of creditors' rights.

Although the latter do not appear in the best light in the public consciousness and in everyday practice, the scientist notes that as a result of contractual relations between the borrower and the credit institution, the legal relations described in the law arise. This fixes the need to fulfill obligations on the part of both the former and the latter ^{[14, pp.151-153]}. At the same time, the modern Russian jurist V. B. Ermilov in the article “Objective bankruptcy: theory and practice" identifies several criteria that make it possible to define insolvency as objective bankruptcy. The researcher considers the estimated inability to make payments on debt obligations to be the first of these signs. This is due to the fact that the debtor, due to the financial and economic situation, loses the opportunity to make the necessary payments. It is this criterion that becomes crucial in determining the signs of objective bankruptcy and, as a result, the decision on the debtor's inability to repay the debt, for example, to make payments on loan obligations ^{[5, pp.77-79]}. A study of the academic literature on bankruptcy issues, in particular, the definition of its objective criteria, allows us to identify the key points of view prevailing in the domestic legal literature on this issue. At the same time, it is worth noting that most scientists share the position that, if bankruptcy acquires signs of an objective phenomenon, the court, in the case of bankruptcy proceedings, decides on the debtor's insolvency, therefore, debt collection is terminated. The criterion of excess of the debt amount over the actual value of the debtor's assets is crucial and determines the fact of objective bankruptcy, located in time coordinates. Another point of view captures the responsibilities of the creditor. In particular, it is pointed out that the latter must stop any attempts to recover from the debtor after the court order, which, in turn, is determined by the objective criteria of its bankruptcy. Thus, A. Z. Bobyleva and O. A. Lvova believe that it is necessary to apply significant economic and financially oriented criteria in the process of determining objective bankruptcy, which would reveal this fact. Pointing to the expediency of financial, accounting and economic assessment of the debtor's insolvency, the researchers note that the fact of bankruptcy, determined by these criteria, must necessarily be objective ^{[2, pp.24-28]}. The same point of view is expressed by V. A. Tyunkov. In the article “Legal regulation of subsidiary liability of the debtor's supervisor in bankruptcy proceedings” from the standpoint of a formal legal approach, the researcher puts forward arguments that, in his opinion, should be used as the basis for a bankruptcy decision. These arguments, however, are data based on the position of the legislator and, according to V. A. Tyunkov, judicial practice. The scientist considers the key of such arguments to be the need to objectively establish the impossibility of paying off debt obligations, which is associated with the actual excess of the debt amount over the debtor's real assets, as it is generally defined in the regulatory framework ^[12]. V. N. Alferov and M. M. Korigova in their work “The development of the concept of subsidiary liability as a tool to increase the effectiveness of the institution bankruptcy and ensuring the economic security of the country” express a point of view on the theoretical foundations of bankruptcy issues in the views of modern legal scholars and, obviously, the legislator himself. According to the researchers, the problems of bankruptcy, which affect key levers and mechanisms of social life and are partly a marker of the well-being of society, become the focus of the theory of the welfare state and the need, respectively, to distribute responsibility among members of society. At the same time, the authors note that subsidiary liability becomes within the framework of this concept as a tool that provokes the objectivity of bankruptcy cases and, at the same time, the division of responsibility between participants in the bankruptcy process ^{[1, pp.24-29]}. At the same time, however, bankruptcy is defined by the legislator as “the debtor's inability to fully satisfy creditors' claims for monetary obligations, for payment of severance payments and (or) for remuneration of persons who work or have worked under an employment contract, and (or) to fulfill the obligation to pay mandatory payments.” This means that a natural or legal person is bankrupt who, for objective reasons, cannot fulfill his debt obligations to the creditor. At the same time, the disposition of bankruptcy regulations presupposes the fixation of the rights and obligations of two parties – the borrower and the lender. These aspects are determined in terms of both the regulatory regulation of economic relations and the fact of equality and equal responsibility of the two subjects of these legal relations, which entails the equivalence of participation in bankruptcy and insolvency disputes. At the same time, when determining the time frame for bankruptcy of legal entities, Part 2 of Article 3 of the Federal Law "On Insolvency (Bankruptcy)" dated October 26, 2002 No. 127-FZ (hereinafter referred to as the Bankruptcy Law) established that in the time scale, the fact of insolvency is established in the event of a three–month delay in payment of debt obligations (this provision, however, applies to hotel types of bankruptcy – bankruptcy of legal entities) (Federal Law "On Insolvency (Bankruptcy)" dated October 26, 2002 No. 127-FZ (last edition). M.. 2024. 62 p. p.19.) This forms a request to the legal science: if the temporary length of bankruptcy is determined for a period of three months, then it is necessary to clarify the moment of the onset of objective bankruptcy, from which the debtor loses the actual ability to pay the debt. If “insolvency” as a legal category can be recognized as correlating with the activities of business entities, which is common everywhere and often indicates only particular aspects of the inability to pay the debt, then objective bankruptcy obviously needs to be considered as the key factual basis for a bankruptcy court ruling (this article does not address issues of out-of-court bankruptcy). The importance of determining the moment of objective bankruptcy, thus, becomes self-evident and closely related to the problems of law enforcement and the real state of affairs of the debtor. In particular, the issue of the moment of the onset of objective bankruptcy is related to the problem of bringing the controlling person to subsidiary responsibility.

For example, this issue may be raised in the framework of proceedings against the debtor in order to identify his real ability to pay on debt obligations or to determine the lack of such opportunities. This aspect is particularly emphasized by the agenda set in legal and judicial practice. Thus, taking into account the provisions of Articles 2, 9, 10 of the Bankruptcy Law, as well as the position set out in the Rulings of the Judicial Board for Economic Disputes of 30.012020 No. 305-ES18-14622(4,5,6) in case No. A40-208525/2015 (Ruling of the Judicial Board for Economic Disputes of the Supreme Court of 30.012020 No. 305-ES18-14622(4,5,6) in case no. A40-208525/2015), in order to hold a person liable for failure to file a debtor's bankruptcy petition, it is necessary to prove a set of conditions: 1. the presence of signs of objective bankruptcy on a particular date; 2. the presence of obligations incurred by the debtor in the period from the moment of the obligation to file a bankruptcy application until the moment the bankruptcy case is initiated by the court, constituting the amount of liability of the person involved on the specified basis. Interpreting this definition, it should be pointed out that it is obvious and highly informative. On the one hand, criteria are established to determine that bankruptcy is objective. On the other hand, the position of the Judicial Board, expressed in this definition, forms clear boundaries of bankruptcy, which facilitates the work of the courts and issues of resolving debt disputes, the responsibility of the debtor and supervisors. However, let's look at this definition in more detail. Based on the literal interpretation of its content, the moment of objective bankruptcy (i.e., the critical moment) occurs when there are two circumstances: 1. the value of net assets has been significantly reduced; 2. the debtor is unable to fully satisfy creditors' claims, including for the payment of mandatory payments (taxes, fees and other mandatory contributions). This state of affairs indicates the following significant aspects. First, the chronological framework of bankruptcy is determined, i.e. the time period when the debtor's bankruptcy becomes a legal fact. This may be accepted by the courts for consideration and accounting in the case of litigation in a specific bankruptcy case. Secondly, the regulatory boundaries of bankruptcy are being established: this is an impossibility in full (!) to satisfy the payment of mandatory payments. This aspect forms clear boundaries for determining the nature of bankruptcy, which should be regarded by the courts as the factual basis for making a decision on the debtor's insolvency and on the termination of debt collection. At the same time, it is important to note that the Bankruptcy Law establishes the obligation of the debtor's head to file a debtor's application with the arbitration court if the debtor meets the criteria of insolvency. The Bankruptcy Law defines "insolvency" as the termination of the debtor's performance of a part of monetary obligations or obligations to pay mandatory payments caused by insufficient funds.

A comparative analysis of these definitions suggests that objective bankruptcy presupposes a more difficult financial situation for the debtor than the presence of insolvency. Such a category as "insolvency" cannot indicate the debtor's real inability to fulfill obligations to creditors, moreover, signs of insolvency are often present in the activities of most business entities that attract borrowed funds. That is why the introduction of such a category as "objective bankruptcy" makes it possible to more accurately determine the circle of persons controlling the debtor and the extent of their responsibility. So, in the Resolution of the Plenum of the Supreme Court of the Russian Federation dated December 21, 2017 No. 53 "On some issues related to bringing persons controlling the debtor to responsibility in bankruptcy" (Resolution of the Plenum of the Supreme Court of the Russian Federation dated December 21, 2017 No. 53 "On some issues related to bringing persons controlling the debtor to responsibility in bankruptcy". Moscow, 2017 33 p. s.8-9) (hereinafter referred to as Resolution of the Plenum of the Supreme Court No. 53) the definition was adjusted: now objective bankruptcy meant the moment when the debtor became unable to fully satisfy creditors' claims, including those related to the payment of mandatory payments, due to the excess of the total amount of obligations over the real value of his assets. Accordingly, in this case it was important to establish two facts: 1. the debtor is unable to satisfy creditors' claims (including those related to the payment of mandatory payments) in full; 2. the total amount of obligations exceeds the real value of the debtor's assets ^{[2, p. 18]}.

Due to the existence of two definitions proposed by the Supreme Court of the Russian Federation, there is currently no consensus in judicial practice on the issue of determining the moment of objective bankruptcy. In a number of decisions, the courts refer to an older Definition, without taking into account the interpretation indicated in the Resolution of the Plenum of the Supreme Court No. 53. It is worth noting that this interpretation can be attributed to formal legal ones, therefore, their specificity correlates with the normative bases of law, but, at the same time, does not take into account the real situation in which the debtor finds himself due to his lack of ability to pay his debt obligations. In addition, this interpretation focuses only on a number of aspects of objective bankruptcy, which raises the question of defining some of the creditor's rights as a person who has the right to recover debt obligations from the debtor. At the same time, the definition of such a critical moment is important not only for persons who have already been held vicariously liable, but also for the controlling persons of organizations in respect of which the bankruptcy procedure has not yet begun. This issue focuses on the problems of determining the essence of objective bankruptcy, which is related to the dynamics of financial and economic indicators of the debtor. It is the proper determination of the moment of objective bankruptcy, which can be carried out only if there is uniformity of law enforcement, that will allow us to correctly assess the risks and avoid unlawful inaction on the part of the head of the legal entity and his subsequent involvement in subsidiary liability. Moreover, judicial practice has not yet developed a clear algorithm for calculating the real value of assets for the purpose of determining the objective moment of bankruptcy, in particular, it has not established a specific billing period within which the amount of accounts payable should be correlated with the real value of assets. However, in the absence of a legal definition, an unspecified settlement procedure creates significant legal uncertainty in determining the moment of onset of a critical financial situation for the debtor. In particular, the Judicial Board for Economic Disputes of the Supreme Court of the Russian Federation, contrary to previously developed legal positions, pointed out that circumstances confirming the objective bankruptcy of a controlled entity can be established, including from indirect signs, such as termination of payments on obligations, etc. The current situation in legislation and judicial practice significantly worsens the situation. persons who are held vicariously liable. In this regard, it seems necessary to carry out legislative work on the creation and regulatory consolidation of a unified concept for determining the moment of the onset of objective bankruptcy. In the opinion of the author of this article, it is necessary to legislate the definition reflected in the Resolution of the Plenum of the Supreme Council No. 53, since it serves to a greater extent the correct distribution of the burden of responsibility for the economic activities of the company.

At the same time, it is necessary to clarify what is meant by the inability to fully meet the requirements and how this moment should be fixed, as well as provide for a number of exceptions for special economic entities. First of all, special rules should be established for developers, whom the Bankruptcy Law identifies as a separate category of debtors – legal entities. Such economic entities are distinguished by the fact that they have the opportunity to make a profit much later than the necessary costs appear for this. Such a time gap occurs because, for example, the developer's profit can be obtained only after the conclusion of equity contracts in construction. Accordingly, in itself, the excess of liabilities over real assets cannot a priori indicate the occurrence of objective bankruptcy. In addition, with the involvement of experts in the field of economic theory of law, it is necessary to develop an algorithm for calculating the real value of the debtor's assets. In order to avoid abuse by debtors and the experts they involve, the competent authorities should prepare methodological recommendations detailing the list of indicators that should be taken into account in the calculation, as well as a package of documents that the debtor must provide to extract the relevant indicators.

Thus, at present, in practice, determining the moment of objective bankruptcy causes difficulties, which are caused both by the lack of a uniform definition of objective bankruptcy fixed in legislation, and by difficulties in the legal assessment of economic indicators that are crucial in resolving a dispute. Objective bankruptcy should be considered as a category that clarifies the issues of law enforcement in cases of bankruptcy. At the same time, the ambiguity of this concept obviously contributes to possible confusion and complications of legal proceedings and court decisions in the field of bankruptcy. The determination of the moment of the occurrence of objective bankruptcy, therefore, becomes a crucial aspect for the court to consider the issue of bankruptcy. Objective criteria, which are indicated by the moment of the occurrence of objective bankruptcy, contribute to resolving the issue of holding the controlling person accountable in the event of non-payment of the debtor's credit obligations. Although bankruptcy is a wide field for legal decisions today, the responsibility of supervisors is poorly understood. Consideration of the issues of subsidiary liability of the controlling person related to the moment of the debtor's objective bankruptcy should be called a key perspective that clarifies the extent and necessity of applying sanctions against him.