Increasing the charter capital through a relative’s contribution during a divorce may be considered an abuse of rights
The cassation court overturned the decision in a case where a member of an LLC, during divorce proceedings, increased the charter capital through a contribution of his father, reducing his own share from 100% to 10%. His ex-wife challenged the transaction as sham, aimed at reducing the marital assets subject to division.
The lower courts dismissed the claim, finding that the increase in charter capital was driven by business necessity. However, the cassation court pointed out that the courts failed to assess the transaction’s true purpose, its economic rationale, and the fact it was executed during the divorce. The case has been sent back for a new trial to examine whether there are signs of an abuse of rights.