The Supreme Court Clarified the Criteria for Subordination of Affiliated Creditors’ Claims in Bankruptcy
The Commercial Division of the Supreme Court reversed the downgrading of the claim of Kemerovo Social Innovation Bank in the bankruptcy of AMP Sbyt and included it in the third priority of the claims register. Three lower courts had subordinated the claim to the liquidation quota, having established the affiliation of the parties and a financial crisis at the borrower.
The Division articulated a key distinction: only claims aimed at providing compensatory financing to overcome the debtor’s crisis are subject to subordination. Where the financing effectively constituted participation in a scheme to strip the debtor’s assets in the absence of any genuine business activity, downgrading the priority is inapplicable, as the relationship is tortious rather than rehabilitative in nature.
For practice, this means that when assessing the priority of claims, courts must distinguish between an attempt to rescue the debtor’s business and participation in an asset-stripping scheme, rather than simply relying on the existence of affiliation and a financial crisis.
