Context and background

Court: Supreme Court of the Russian Federation.

Ruling: dated August 26 in Case No. А40-4457/2025.

Dispute: recovery of damages from an insolvency practitioner.

Outcome: The Supreme Court confirmed the legality of recovering RUB 5.8 million from the insolvency practitioner for transferring property without full payment.

Circumstances of the case

The insolvency practitioner of US-200 LLC sold an apartment for RUB 6.1 million.

The purchaser paid only the deposit of RUB 298,000. Nevertheless, the insolvency practitioner:

signed the acceptance certificate;

confirmed that the purchase price had been paid in full;

submitted the documents for registration of the transfer of title.

As a result, the apartment left the bankruptcy estate with virtually no payment received.

Attempt to recover the debt

The insolvency practitioner subsequently filed a claim against the purchaser to recover the unpaid amount.

The court awarded the outstanding debt, but the money could not actually be recovered. Measures to collect the debt from the purchaser’s income were cancelled because enforcement was impossible.

In addition, the claim was filed more than six months after the apartment had been transferred, while interim measures were sought even later—after the property had been resold to third parties.

Position of the lower courts

The appellate and cassation courts refused to award damages against the insolvency practitioner.

They held that:

a technical error had occurred;

the insolvency practitioner had taken measures to remedy its consequences;

recovering damages from the insolvency practitioner was an extraordinary remedy;

liability was possible only if intentional actions had been proven.

What did the Supreme Court clarify?

An insolvency practitioner must compensate for losses caused to the debtor or creditors by the failure to perform, or improper performance of, his or her duties.

Losses include:

a reduction of the bankruptcy estate;

the loss of an opportunity to increase it;

the loss of property or the inability to obtain payment for it.

An insolvency practitioner is liable not only for intentional violations, but also for negligence, including ordinary negligence.

The insolvency practitioner’s standard of conduct

The insolvency practitioner must act:

in good faith;

reasonably;

in the interests of the bankruptcy estate;

in compliance with the terms of the contracts concluded.

Before transferring the property, the insolvency practitioner was required to verify that full payment had been received. Such verification would not have presented any particular difficulty.

A reference to a technical error does not release the insolvency practitioner from liability.

Liability for inaction

The Supreme Court took into account not only the initial violation, but also the insolvency practitioner’s subsequent conduct.

The following circumstances were significant:

the delayed filing of the claim against the purchaser;

the untimely application for interim measures;

the absence of effective measures to recover the property or the money;

the failure to provide complete information about the dispute in the insolvency practitioner’s report.

Protection of creditors

The Supreme Court confirmed that recovering damages from an insolvency practitioner:

is not an extraordinary remedy;

does not depend on first bringing a claim against the purchaser;

does not require all other methods of debt recovery to be used first;

may be pursued independently of claims against other persons.

Any other approach would effectively shift to the debtor and creditors the risk of the insolvency practitioner’s improper performance of his or her duties.

Practical significance

According to Daria Vintovkina, the Supreme Court’s ruling:

confirms the insolvency practitioner’s liability for negligent violations;

expands creditors’ opportunities to protect the bankruptcy estate;

emphasizes the need to verify payment before transferring property;

requires the insolvency practitioner to respond promptly to identified violations;

demonstrates that subsequent inaction may also affect the extent of liability.