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Representation of Gazprom-Nefterservice
INTELLECT-S'S client Gazprom-Nefterservice, a managing service company (part of Gazprom Neft, one of the world's top 20 oil companies, sold the business of its wholly owned motor road-building and transport subsidiary, Noyabrskneftespetstroi. The transaction contemplated two payments: 70% of the purchase price at closing, and 30% later, secured by the mortgage of Noyabrskneftespetstroi's property held by Gazprom-Nefterservice.
By the due date of the remainder, however, Noyabrskneftespetstroi had been declared bankrupt, and the buyer refused to pay. Gazpromneft-Nefteservice applied through the court for the inclusion of its claims, based on the mortgage agreements, in the register of Noyabrskneftespetstroi creditors' claims.
The trial court refused the inclusion, holding that it would constitute the sole member's withdrawal from the company in bankruptcy, which is prohibited under the law.
Our comment:
Gazprom-Nefterservice retained INTELLECT-S to appeal the holding and the refusal. The case involved several highly controversial issues of mortgage, corporate, and bankruptcy law, specifically:
- courts' attitude toward management buyouts in a bankruptcy cases;
- legitimacy and legal validity of mortgages to third parties;
- analogous application of rules applicable to realty, in corporate disputes;
- exercise of corporate powers during pending bankruptcy proceedings.
Although we did not prevail on appeals to include our client's claims in the claims register, our apt trial and mediation strategy created a situation where the buyer chose on its own accord to perform its obligations out of court and pay the seller the outstanding reminder of the price.
The case was carried out by Alexander Latyev, Head of practice, PhD, INTELLECT-S.
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