Representing a creditor in insolvency

What is happening

A supplier shipped goods on credit for years, and then a bankruptcy petition against the buyer appeared on the court database. There is already a judgment for the debt, but it is not clear what to do next or where to file the claim.

Several companies nobody has heard of have been admitted to the register, and their claims together outweigh those of all the genuine creditors. Everything suggests they are linked to the debtor and intend to control the meeting and the choice of insolvency officer.

The procedure is in its second year, and the officer's reports say only that no assets have been found. Yet the creditor knows that shortly before the bankruptcy the debtor had a warehouse, machinery and receivables, and wants to know where they went.

What the law says

• The procedure for establishing creditors' claims is set by Federal Law No. 127-FZ of 26 October 2002 "On Insolvency (Bankruptcy)" (the Insolvency Law). During supervision, a claim must be lodged within thirty calendar days of publication of the notice of the procedure; otherwise the creditor does not take part in the first creditors' meeting.
• In bankruptcy proceedings the register closes two months after publication of the notice that the debtor has been declared bankrupt. Claims lodged later are paid only once registered claims have been met, which in practice often means not at all.
• Any creditor on the register may object to other creditors' claims. For claims by parties connected with the debtor the courts apply a higher standard of proof, and funding provided by the debtor's controlling persons may be subordinated.
• Creditors vote at meetings in proportion to their claims and influence key decisions: the choice of officer, how property is sold and whether to go to court. The officer's actions can be challenged in the commercial court.
• A creditor whose claim is confirmed by a judgment may itself petition for the debtor's bankruptcy. Before filing it must publish notice of its intention in the Unified Federal Register of Bankruptcy Information at least fifteen calendar days in advance.
• Creditors may challenge the debtor's transactions and seek to hold controlling persons subsidiarily liable where the officer fails to do so.

What we do

• We monitor notices about the debtor in the Unified Federal Register of Bankruptcy Information and in Kommersant, and lodge the claim for registration in time.
• We analyse other creditors' claims, look for signs that they are connected or fictitious, and file objections.
• We represent the creditor at creditors' meetings and on the creditors' committee, preparing voting positions and agenda proposals.
• We oversee the insolvency officer: requesting reports, analysing bank statements and transactions and, where the officer is inactive, filing complaints and seeking removal.
• We initiate challenges to suspicious transactions and claims against controlling persons where they offer a real prospect of adding to the estate.
• Where appropriate, we file the bankruptcy petition ourselves, including publication of the notice of intention and the choice of candidate officer.

What we will need from you

• The judgment and writ of execution, or the contracts and primary documents evidencing the debt.
• The number of the bankruptcy case, if one has already been opened.
• A reconciliation statement, correspondence with the debtor and details of any part-payments and their dates.
• Everything known about the debtor's assets, its director, its participants and related companies.
• Details of any pledges and guarantees securing your claim.