COMMENTARY BY MIKHAIL GUSEV IN PRACTICE ON PRAVO.RU
A gift agreement cannot be invalidated solely because of kinship and debts: the abuse must be clear and convincing.
In 2013, an individual inherited a share in a Moscow apartment, and a month later gifted it to her cousin. In 2020, the individual filed for bankruptcy (case №. A40-231308/2020). The financial advisor decided to challenge the gift agreement (Part 2 of Article 10 of the Civil Code of the Russian Federation, Article 168 of the Civil Code of the Russian Federation) and collect the value of the disputed share in the apartment (6.3 million rubles) into the bankruptcy estate.
The position of the financial advisor and the court of cassation: at the time of the gift, the debtor had outstanding debt and overdue loans. The transaction is fictitious and harmful to creditors.
The position of first and appellate instance courts: the debtor signed the agreements with creditors before receiving a share in the inheritance, therefore, the creditors could not expect to have their claims satisfied at the expense of the inheritance. When concluding the gift agreement, the individual was not insolvent, the donee had to intention to harm the creditors.
The Supreme Court's of the Russian Federation Approach: the kinship between cousins does not in itself mean that one is aware of the obligations of the other. The presence of unfulfilled obligations to creditors by the debtor at the time of the transaction does not ipso facto invalidate the transaction, unless there is an intent to harm the creditors.
"When making a gift between relatives, there must be a reasonable justification: a need for residential property (one of the children has started an independent life, got married, several children were born) or an opportunity to donate real estate (provided that the gift is not the only housing of the debtor himself and the debtor is not donating the most expensive real estate of his existing properties)," clarifies Mikhail Gusev, the Head of Dispute Resolution Practice at Infralex.
When a transaction is challenged as suspicious (clause 2 of Article 61.2 of the Bankruptcy Law), it is assumed that the relative knew about its harm to creditors. In this case, it is necessary to prove (1) intent (this is the main and mandatory element) and (2) the awareness of the other party about the abuse on the part of the bankrupt (e.g., the existence of collusion between the debtor and the other party).
Such evidence may be a court order on debt collection, bringing the debtor to justice, collecting damages from him. The key is that the other party to the transaction (spouse, adult children, parents of the debtor) must know about these claims against the debtor.