Procedural Status of Persons Controlling of a Debtor in a Bankruptcy Case

Abstract

In Russia the number of persons brought to subsidiary liability is growing every year. The beneficiaries of such attraction are the debtor’s creditors; the institution of subsidiary liability is aimed to protect their interests. At the same time, the protection of the interests of controlling persons is relegated to the background. The procedural status of controlling persons in a bankruptcy case has not been sufficiently studied both from a theoretical and practical point of view. This question seems to be relevant, because in 2021 the Constitutional Court of the Russian Federation and the Supreme Court of the Russian Federation stated that there was a gap in legal regulation and the restriction of controlling persons in the right to defense. This article establishes the difference between persons participating in a bankruptcy case and persons participating in an arbitration process in a bankruptcy case; describes the current procedural status of the controlling persons; the current judicial practice is analyzed and a proposal is developed to amend the Bankruptcy Law in the relevant part.