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Appeal’s Decision in AutoKrAZ Bankruptcy Case Confirmed Illegal by Supreme Court

News date: 29 January 2024

In the bankruptcy case of Private Joint Stock Company AutoKrAZ, the Supreme Court canceled the decision of the Northern Commercial Court of Appeal denying recognition of a number of creditors’ claims, and referred the case for retrial. The case was considered by the Supreme Court on 16 October 2023.

Therefore, the bankruptcy case of PJSC AutoKrAZ has been pending before the Commercial Court of Kyiv City since 2018. Property administrator of the debtor company has been appointed Vadym Kizlenko, Counsel, Insolvency Receiver, Co-Head of Insolvency & Financial Restructuring at Ilyashev & Partners Law Firm.

In Ukraine, AutoKrAZ is the only truck manufacturer with a closed production cycle and is a strategic enterprise. Since the process of disposing of the company’s assets is underway and a set of measures is being taken to restore solvency, no liquidation procedure has been appointed. In particular, the company paid off most of its salary debts.

In 2021, the court approved the register of creditors’ claims of AutoKrAZ and determined the priority of repayment of their claims. However, one of the creditors – PKP ALPHATEX LTD – appealed the decision of the Commercial Court of Kyiv City regarding the recognition of the claims of other creditors in order to increase the percentage share of their own monetary claims in the bankruptcy procedure of AutoKrAZ. The Northern Commercial Court of Appeal made a decision, that satisfied the appeal of the mentioned creditor, partially canceled the decision of the court of first instance and refused to recognize the creditor claims of a number of companies (refused to include them in the register of claims of the debtor’s creditors).

In order to protect the interests of AutoKrAZ, Vadym Kizlenko filed a cassation appeal to the Supreme Court and provided reasonable evidence that the Commercial Court of Appeal came to the wrong conclusion that individual creditors had no debt solely on formal grounds. In addition, the case in the Court of Appeal was considered by an incompetent panel of the court.

The Supreme Court agreed with Vadym Kizlenko’s arguments, cancelled the appellate decision and referred the case for a new trial to the Northern Commercial Court of Appeal.

Earlier, Ilyashev & Partners Law Firm reported on the protection of the interests of Hotel Salut in the Supreme Court in a dispute with the National Bank of Ukraine.