A bankruptcy manager appointed in the bankruptcy proceedings against a large confectionery factory claimed imposition of secondary liability on its former directors, including the AGP client, arguing that the consecutive directors of the factory failed to meet their duty to bring a bankruptcy petition with respect to the factory to court.
The bankruptcy manager opined that over the last 6 years the factory had been having the elements of objective bankruptcy, its net assets being negative, multiple legal proceedings against the factory being pending and judicial acts and obligations toward its creditors remained outstanding.
Having examined the business operations of the factory, AGP attorneys proved that, notwithstanding economic problems faced by the factory, during the time when their client served as the director of the factory its financial results were consistently increasing, accounts payable reducing and the factory was meeting all its obligations toward the creditors.
AGP ascertained when and why the elements of objective bankruptcy appeared. The court accepted that such circumstances occurred several years after the AGP client ceased being the general director of the factory and therefore fully dismissed the claim.