In bankruptcy proceedings against a big Moscow-based developer, a group of participants in a shared construction project claimed in court that secondary liability should be imposed on the developer’s former managers, including the AGP client.
The client was charged of being an accomplice in driving the developer into bankruptcy, in particular, by making a number of transactions with land plots allocated for construction of residential buildings. The matter was complicated by the specifics of bankruptcy rules applicable to developers and by the fact that the court had previously declared the transactions invalid on special grounds set by the Bankruptcy Law and imposed secondary liability on the other top managers of the developer.
To defend the client, we used some non-standard defense strategies, including the doctrine of estoppel. They analyzed lots and lots of the bankruptcy case files, brought to light contradictory, inconsistent conduct of the lenders and their conflicting arguments and persuaded the court that under the circumstances the client should not be held liable for the developer’s bankruptcy.
We also showed that the client was not guilty of the developer’s bankruptcy and the land plot transactions, although having been declared invalid, did not constitute the direct cause of its bankruptcy.
Apart from that, AGP attorneys proved that the statute of limitation under the Bankruptcy Law being in effect at the time of making the transactions had already run out.
The Arbitrazh (Commercial) Court of Moscow accepted the arguments of the AGP attorneys in full and dismissed the claim for imposition of secondary liability on the client. The Ninth Arbitrazh Court of Appeals upheld the ruling of the trial court.
Our attorneys Alexey Gorodissky and Dmitry Yakushev acted as defense lawyers for the client.
