Successfully defending a contract for fiduciary management of a major shopping mall in a bankruptcy case

Completion date:  2022

Our Bankruptcy and Anti-crisis Protection of Business Practice has proved the lawful nature of a fiduciary management contract that has been challenged by the debtor’s receiver on the ground that the management company has overstated the service fee and expenses.

After three years of legal battles and 40 court hearings, our bankruptcy and anti-crisis protection of business team has managed to defend the client’s contract for fiduciary management of a major regional shopping mall. What makes the dispute particularly important is the fact that the amount of the overstatement has been asserted as the ground for charging the client around RUB 5 billion in secondary liability in a related standalone dispute. 

A particularly difficult aspect of defending the client’s interests was justifying the value of a set of various services supplied by the managing company, including on top of the list provided for in the contract.

“Not only did we succeed in proving the arms-length nature of the contractual terms, but we also formed a precedent-setting position that a receiver is not entitled to dispute transactions that have been agreed with the legal predecessor of the majority creditor. At present, we are continuing to defend the interests of the fiduciary manager in the dispute regarding secondary liability being imposed under the obligations of the settlor of the fiduciary management arrangement”.

Leonid Barkov

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