Invalidation of a deed in bankruptcy (+Template of application for recognition of a deed as invalid (in the bankruptcy procedure, statement from the creditor)

General provisions of invalidating transactions

According to the presumption of legality of the deed, the deed is valid if its invalidity is not expressly established by law or if it is not recognized by the court as invalid ( Article 204 of the Civil Code of Ukraine ).

The basis for the invalidity of the deed is non-compliance by the party (parties) at the time of the deed with the requirements established by the first, third , fifth and sixth parts of Article 203 of this Code ( part 1 of Article 215 of the Civil Code of Ukraine ).

According to Art. 203 of the Civil Code of Ukraine , the content of the transaction cannot contradict this Code, other acts of civil legislation, as well as the interests of the state and society, its moral principles. The person who commits the deed must have the required amount of civil legal capacity. The expression of will of the participant in the transaction must be free and correspond to his inner will. The act must be performed in the form established by law. The act must be aimed at the actual occurrence of legal consequences caused by it. The act committed by the parents (adoptive parents) cannot conflict with the rights and interests of their minor, minor or incapacitated children.

At the same time, the institution of invalidating the debtor's transactions within the bankruptcy case is a universal means of protection in insolvency relations and part of the single mechanism of legal regulation of insolvency relations, which is aimed at maintaining a balance of interests not only of persons participating in the bankruptcy case, but also of persons involved in a bankruptcy case, for example, of the debtor's counterparties ( Supreme Court ruling dated September 28, 2021 in case No. 21/89b/2011(913/45/20 ).

At the same time, the Civil Code of Ukraine defines the general grounds for invalidating transactions with the participation of the debtor. At the same time, the requirements of the Code of Ukraine on Bankruptcy Procedures (hereinafter referred to as the Code of Bankruptcy) are specific to the general grounds established by the Civil Code of Ukraine for declaring transactions invalid.

Grounds for invalidating the debtor's transactions in the bankruptcy procedure

Article 42 of the Code of Civil Procedure regulates the invalidation of the debtor's transactions in the bankruptcy procedure

The commercial court, within the framework of bankruptcy proceedings, upon the application of the arbitration administrator or creditor submitted in the manner specified in Article 7 of this Code, may invalidate transactions or deny property actions committed by the debtor after the opening of bankruptcy proceedings or within three years, which preceded the opening of bankruptcy proceedings, if they violated the rights of the debtor or creditors, on the following grounds:

• the debtor fulfilled the property obligations before the established term;
• the debtor, prior to the initiation of bankruptcy proceedings, assumed obligations, as a result of which he became insolvent or the fulfillment of his monetary obligations to other creditors became completely or partially impossible;
• the debtor alienated or purchased property at prices, respectively lower or higher than market prices, provided that at the time of acceptance of the obligation or as a result of its fulfillment, the debtor's property was (became) insufficient to satisfy the demands of creditors;
• the debtor paid another person or accepted the property in consideration of the fulfillment of monetary claims on the day when the sum of the creditors' claims against the debtor exceeded the value of the property;
• the debtor has assumed collateral obligations to ensure the fulfillment of monetary claims ( Part 1 of Article 42 of the Code of Civil Procedure ).
• Acts committed by the debtor during the three years preceding the opening of bankruptcy proceedings may be declared invalid by the commercial court within the framework of bankruptcy proceedings upon the application of the arbitration administrator or creditor also on the following grounds:
• the debtor alienated property free of charge, assumed obligations without corresponding property actions of the other party, waived his own property claims;
• the debtor has entered into an agreement with the interested party;
• the debtor has entered into a gift agreement ( Part 2 of Article 42 of the Code of Civil Procedure ).

Consequences of invalidity

In the event that the debtor's transactions are recognized as invalid on the grounds provided for in the first or second part of this article, the party to such a transaction is obliged to return to the debtor the property that it received from the debtor, and in the event that it is impossible to return the property in kind - to compensate its value in monetary terms at market rates prices that existed at the time of execution of the transaction ( Part 3 of Article 42 of the Code of Civil Procedure ).

Based on the results of consideration of the application of the arbitration manager or creditor to declare the debtor's deed invalid, the commercial court makes a decision ( Part 3 of Article 42 of the Code of Civil Procedure ). Therefore, both the creditors in the bankruptcy case and the arbitration administrator are the subjects of the appeal with the relevant statement.

Jurisdiction of lawsuits for annulment of transactions in the bankruptcy procedure

According to Art. 7 of the Code of Civil Procedure, disputes in which the debtor is a party are considered by the commercial court according to the rules provided for by the Commercial Procedural Code of Ukraine , taking into account the features specified in this article.

The commercial court, in whose proceedings there is a bankruptcy (insolvency) case, resolves within the scope of this case all property disputes in which the debtor is a party; disputes with claims against the debtor and his property; disputes about the invalidation of auction results; disputes about the invalidation of any transactions concluded by the debtor; disputes about the return (claim) of the debtor's property or reimbursement of its value, respectively; disputes about the collection of wages; disputes about the reinstatement of officials and employees of the debtor; disputes regarding other claims to the debtor.

Statements (plaintiffs) of participants in bankruptcy (insolvency) proceedings or other persons in disputes in which the debtor is a party are considered within the framework of bankruptcy (insolvency) proceedings according to the rules of simplified claim proceedings.

Materials of the case in which the debtor is a party, regarding the disputes specified in part two of this article, proceedings in which are opened before or after the opening of bankruptcy (insolvency) proceedings, at the initiative of a party to the case or the court immediately, but no later than five working days, are sent to the commercial court in which the bankruptcy (insolvency) case is pending, which examines the dispute on the merits within the scope of this case.

Create a declaration of invalidity of the debtor's deed (in the bankruptcy procedure, a statement from the creditor) in the Instaco constructor using the link . To create, you only need to enter the necessary data in the designer.

Attorney Natalya Krasnokutska (Instagram @advocate_knn , Facebook instaADVOCATE ) prepared the application for invalidation of the debtor's deed (in the bankruptcy procedure, statement from the creditor).

The lawyer conducts legal consultations on issues of business support:

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