Among other things, new Federal Law No. 266-FZ (July 29, 2017) (the "Amendment") supersedes provisions concerning the vicarious liability of "controlling persons" for a bankrupt corporate debtor’s obligations set forth in RF Law No. 127-FZ on Insolvency (October 26, 2002) (the "Insolvency Law").
The Amendment defines a "controlling person" as any individual or entity who, during the three-year period preceding the existence of "signs of insolvency" or court approval of a bankruptcy petition, had the power to direct the debtor’s affairs, including the execution of contracts.
Officers, directors, liquidators, members of a liquidating committee, controlling shareholders, and any person who benefited from the unlawful or bad-faith actions of persons authorized to represent the debtor under its constituent documents or by power of law are presumed to be controlling persons, although the presumption is rebuttable. Additional persons can also be deemed controlling if they meet specified criteria.
Under the Amendment, controlling persons may be held vicariously liable if: (i) creditor claims cannot be satisfied as a consequence of a controlling person’s actions or inactions, including dismissal of bankruptcy proceedings because of lack of adequate funds; (ii) their actions or omissions resulted in serious harm to the debtor’s financial condition, whether or not those actions or omissions caused the debtor’s insolvency; (iii) they failed to timely file a bankruptcy application on the debtor’s behalf; or (iv) they violated the Insolvency Law by, among other things, causing the debtor to file for bankruptcy when it was still able to pay its obligations in full.
An application to impose vicarious liability upon a controlling person may be filed with the bankruptcy court by a receiver, creditors, and existing or former employees to whom the debtor is indebted or their representatives. An application must be filed no later than three years after the date when the applicant became aware or should have become aware of grounds for vicarious liability, but in no case later than three years after the debtor was declared bankrupt (among other things), with certain exceptions that may extend the limitations period to 10 years.
If the court grants the application, it may, among other things, direct that creditor claims be satisfied as part of the debtor’s insolvency proceedings; sold; or, in some cases, assigned in whole or in part to a creditor, in which case the creditor will have a direct claim against the controlling person. To the extent that the controlling person satisfies his or her vicarious liability, he or she will have a subordinated subrogation claim against the debtor’s bankruptcy estate.