Disputes regarding the interests of creditors of UzDEUavto-Voronezh are ongoing
The Arbitration Court of the Voronezh Region continues to address the issue of imposing subsidiary liability on controlling individuals of the debtor in the high-profile bankruptcy case of ZAO PII “UzDEUavto-Voronezh,” which was the sole distributor of the Uz-Daewoo automotive concern in Russia.
Recall that I-RE LLC filed a petition with the arbitration court seeking to impose subsidiary liability on controlling individuals of the debtor from Uzbekistan: JSC “UZAUTO MOTORS,” joint-stock corporation “Uzavtosanoat,” LLC “AVTOSANOAT INVEST,” as well as the directors of the debtor: Yu.L.Kan , Kh.R.Muzaffarov, I.Yu.Davydova.
The court granted the request of I-RE LLC and recognized the grounds for holding UZAUTO MOTORS, Uzavtosanoat, AVTOSANOAT INVEST, as well as the directors Yu.L.Kan , Kh.R.Muzaffarov subsidiarily liable for the debts of the debtor.
This was a significant development in safeguarding the interests of creditors against the wrongful actions of controlling individuals of the debtor on the eve of bankruptcy.
However, in August 2023, the cassation court overturned the decision of the Arbitration Court of the Voronezh Region regarding the imposition of subsidiary liability on UZAUTO MOTORS, Uzavtosanoat, AVTOSANOAT INVEST, sending the case for reconsideration.
According to Konstantin Ivanchin, a partner at Inmar Legal Ltd representing the interests of I-RE, LLC the first-instance court, upon reconsideration, will need to establish the circumstances of the objective bankruptcy of ZAO PII “UzDEUavtoVoronezh,” determine the moment when fulfilling obligations to creditors became impossible for the company, and identify the cause of the impossibility of fulfilling obligations, i.e., the reason for the debtor’s insolvency. Additionally, the court must determine whether the respondents (individually or collectively) engaged in any wrongful actions that contributed to the bankruptcy.
The resolution of this dispute is crucial for holding responsible parties accountable and protecting the interests of diligent creditors.
The new hearing for the dispute is scheduled for January 22, 2024.