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Kyiv Economic Court allowed the Ukrainian debtor – Private Joint-Stock Company Creative – not to repay the debt to the Russian creditor of over UAH 3 million.
Thus, on 7 August 2023, Kyiv Economic Court closed the proceedings on the claims of the creditor – Mytishchi Milk Factory OJSC, incorporated in the Russian Federation – in the bankruptcy case of Creative PrJSC.
Vadym Kizlenko, Counsel, Attorney at Law, Insolvency Receiver at Ilyashev & Partners Law Firm was appointed by the court as an insolvency receiver in this case and, accordingly, acts as the liquidator of an enterprise, which is part of the Creative Industrial Group – one of the largest agricultural products’ processors in Ukraine.
Kyiv Economic Court declared Creative PrJSC as bankrupt by resolution back in 2018 and initiated the liquidation procedure. Currently, all of the debtor’s property has been sold, the procedure for repaying the creditors’ claims is ongoing in accordance with the priority determined by the Code of Ukraine on Bankruptcy Procedures.
One of the creditors recognized by the court before Russia’s full-scale invasion of Ukraine was Mytishchi Milk Factory, which claimed repayment of a debt of over UAH 3 million. Due to the work carried out by Ilyashev & Partners’ Counsel and Insolvency Receiver Vadym Kizlenko, the court found that Mytishchi Milk Factory is a legal entity established and incorporated under the laws of the Russian Federation.
In this regard, the court concluded that the claims of the creditor – a legal entity, established and incorporated under the laws of the Russian Federation, cannot be fulfilled and recognized due to the presence of a moratorium (ban) on their fulfillment, established by the Resolution of the Cabinet of Ministers On Ensuring Protection of National Interests on Upcoming Claims of the State of Ukraine in Connection with the Military Aggression of the Russian Federation dated 3 March 2022 No. 187.
“The issue of the procedural status of creditors connected with the Russian Federation in bankruptcy cases of Ukrainian debtors is currently quite relevant and controversial. Legislation in this direction is changing slowly and liberally, – says Vadym Kizlenko. – In my opinion, creditors associated with the Russian Federation do not have the right to participate in bankruptcy cases in any status. In view of the moratorium introduced by Ukraine on satisfying the claims of such persons, they are not actually creditors. The monetary claims of such companies are not subject to recognition in bankruptcy proceedings (including the impossibility of opening bankruptcy proceedings based on the applications of such persons), and in relation to claims recognized before 24 February 2022, the proceedings are subject to closure. In practice, such “creditors” only delay the bankruptcy procedure by challenging the procedural documents in the case and make it impossible to complete the bankruptcy procedures, since the claims of such creditors cannot be repaid, and it is impossible to complete the bankruptcy procedure with outstanding claims.”
Therefore, the court agreed with the arguments of Ilyashev & Partners’ Counsel and Insolvency Receiver Vadym Kizlenko and closed the bankruptcy proceedings of Creative PrJSC regarding Russian creditor’s monetary claims.