Our client is part of a large corporate group and acted as a guarantor for a RUB 1.2 billion loan obtained by the parent company. The parent company subsequently defaulted on the loan, and the lender obtained a court judgment for the recovery of the debt. After enforcement proceedings proved unsuccessful due to the borrower’s lack of funds, the lender filed for bankruptcy against both the parent company and all guarantors, seeking to recover the debt from them jointly and severally.
In bankruptcy proceedings No. А56-111063/2022/subs., the bankruptcy trustee sought to hold the management of the guarantor company subsidiarily liable, arguing that the liabilities assumed under the guarantee exceeded both the value of the guarantor’s assets and its annual revenue. Accordingly, if a claim had been brought under the guarantee agreement, the company would have been unable to honour its obligations. In the trustee’s view, the management’s decision to provide the guarantee therefore constituted unreasonable and bad-faith conduct.
We successfully demonstrated that providing intra-group guarantees is a common practice in intercompany lending, even where the guarantor’s potential liability exceeds the value of its assets. We also established that the bank had been provided with this information before the guarantee agreement was signed. Accordingly, the management’s actions were consistent with ordinary business practice, precluding the grounds for holding the guarantor company’s management subsidiarily liable for the company’s debts.
