More than RUB 33 million repaid by an affiliated company: should the insolvency administrator still be rewarded?

A significant ruling by the Commercial Court of the North-West District has clarified an important issue in Russian insolvency practice: should an insolvency administrator receive performance-based remuneration if creditors’ claims are repaid by an affiliated third party rather than the debtor itself?

In case No. А56-89116/2023, an affiliated company repaid RUB 33 million of the debtor’s liabilities. The cassation court concluded that the decisive factor is not who ultimately transferred the funds, but whether the insolvency administrator’s actions directly led to the repayment.

The decision was featured by PRObankrotstvo, one of Russia’s leading media platforms dedicated to insolvency and restructuring law, with commentary from Maxim Emerov, Counsel at Tenzor Consulting Group.

According to Maxim Emerov, the cassation court correctly focused on the administrator’s actual contribution to the outcome. The administrator’s investigation into signs of intentional bankruptcy and preparation for challenging suspicious transactions created sufficient legal pressure on the controlling persons, ultimately motivating them to repay the debt through an affiliated company.

The ruling reinforces an important principle: when determining success-based remuneration, courts should evaluate the effectiveness of the insolvency administrator’s work rather than rely solely on the formal source of repayment.

This decision represents another important step in the development of Russian insolvency practice and provides valuable guidance for future disputes concerning administrators’ remuneration.

This case reflects the type of complex insolvency and restructuring matters our team works on every day, advising businesses across manufacturing, automotive, energy, construction and other key industries.