The Supreme Court makes an important decision regarding bankruptcy law in favour of RASK’s client
On 30 January 2022, the Supreme Court made a landmark decision in favour of RASK’s client in a case regarding the transfer of property belonging to a bankruptcy estate after the abatement of the bankruptcy proceedings and the effect of a breach of obligations by the trustee in the bankruptcy on the validity of the property transfer transaction. In its judgement, the Supreme Court considered the question of whether transferring a claim belonging to a bankrupt debtor by the bankruptcy trustee after the bankruptcy proceedings was against good practice and, as a result, a void transaction.
The Supreme Court declared that based on the circumstances of the dispute, the transfer of the claim belonging to the bankruptcy estate by the bankruptcy trustee after the abatement of the bankruptcy proceedings was valid, and the validity of the transaction is not affected by possible violations against the trustee, specifically the failure of the trustee to collect the claim during the bankruptcy proceedings.
In its decision, the Supreme Court has clearly expressed the position that the validity of the transaction performed by the bankruptcy trustee is not dependent on the fulfilment of the trustee’s due diligence, and the trustee’s possible losses in connection with following the procedures stipulated in the Bankruptcy Act must be remedied through the trustee’s responsibility.