The trustee’s letter arrives when the deal is long forgotten
Kirill Vetrov owns a chain of distribution centres and buys warehouses roughly every two years. The story is fictional, though it is assembled from quite typical disputes. In March 2024 he bought a complex in the Moscow region from Terminal-Vostok LLC for RUB 210 million. The seller was in a hurry, complained of a cash-flow gap and came down on the price. Vetrov paid by transfer and got on with installing the racking.
In October 2025 his secretary brought him a registered letter. Inside was a copy of the bankruptcy trustee’s application and a valuer’s report putting the same warehouse at RUB 340 million. The court had accepted the bankruptcy petition against Terminal-Vostok on 20 January 2025, ten months after the purchase.
Everyone’s first reaction is the same: what has this got to do with me, I paid, didn’t I?
The law looks at it from the other side. Challenging transactions in bankruptcy exists to bring back into the estate what left the company shortly before its collapse, and the buyer becomes a respondent in the same commercial (arbitrazh) court case. Such applications are filed during bankruptcy proceedings or external administration, which is why the letter comes six months or more after the event. A creditor holding more than 10% of the register may file in the trustee’s place.
Which transactions are challenged and within what period
Far more than sales are at risk: the law extends these rules to ordinary payments and even to a director’s bonuses. In the Terminal-Vostok case the trustee picked out three operations.
Vetrov’s transaction fell into the most unpleasant window, the one year before the petition was accepted. Here paragraph 1 of Article 61.2 applies: the debtor received significantly less than it gave, and that is enough. Whether the buyer knew of the seller’s problems is formally irrelevant.
The second operation is older. In November 2022 the company’s owner, Arkady Lunin, transferred a fleet of tractor units to a firm owned by his wife’s brother for RUB 3 million. Two years and two months passed before the petition, so paragraph 2 applies, with its three-year window. It requires proof of an intent to harm creditors, actual harm, and the other party’s awareness of that intent. But for insiders the law presumes almost all of this in advance. If the company was already unable to cope with its debts and gave the property away for nothing or to one of its own people, the intent is deemed established. The same goes for a transfer of 20% or more of balance-sheet assets. And a relative will have to prove for himself that he suspected nothing.
The third story concerns an investor. Olga Nazarova lent the company RUB 45 million, and in September 2024, four months before the petition, she was repaid in full ahead of schedule while suppliers sat waiting on overdue invoices. That is a preference under Article 61.3. Within the month before the petition or later, the mere fact that a creditor had been moved ahead of the queue would have been enough. Within six months, the trustee usually has to prove that the recipient knew of the inability to pay. Olga was let down by her inbox: every month it received a management report with a table of overdue payables.
A payment older than six months is beyond the reach of Article 61.3, and paragraph 2 of Article 61.2 cannot be substituted for it: in Review No. 5/2026 the Supreme Court reiterated that a preference is not in itself harm to the other creditors.
Incidentally, the law does protect routine business. Transactions in the ordinary course of business worth up to 1% of assets are not challenged as undervalued or preferential. Affiliated companies should not count on this: in the same review the court removed that protection from payments to an affiliated recipient.
And beyond three years? Articles 10, 168 and 170 of the Russian Civil Code remain, but the courts expect defects that go beyond ordinary suspiciousness.
A below-market price decides nothing on its own
Back to the warehouse. RUB 210 million against RUB 340 million, a difference of 38%. Lower courts often reason simply: the expert named a figure, the deviation is more than 20%, the transaction is invalid.
There is a catch here, and it favours the buyer. There is no percentage threshold in either the law or the official guidance. Back in 2022, in Case No. 306-ES21-4742, the Supreme Court held that unequal consideration is an evaluative concept and that a 22.8% deviation does not in itself prove it. And in spring 2026 came Ruling No. 307-ES25-13338: a property was bought for RUB 5 million, an expert valued it at RUB 9.37 million, three courts set the transaction aside, and the Supreme Court dismissed the trustee’s claim. The dispute concerned an apartment, but the conclusion was included in Thematic Review No. 12/2026, and in our view the logic holds for any asset.
What worked? The buyer found the listing on an open platform and negotiated, and the price stayed above the cadastral value. In the contract the seller gave an assurance that there were no debts and no plans for bankruptcy, and the court held the falsity of that assurance against the seller, not the buyer.
Vetrov had something to show as well. The trustee’s report described an intact property, whereas in reality the roof was leaking and the anchor tenant had moved out two months before the deal. So we asked for an expert valuation as at the contract date, reflecting precisely that condition.
What the buyer loses if the transaction is set aside after all
The usual thinking goes: we hand back the warehouse and get our money back. In bankruptcy the order is different. First the buyer returns what was received to the estate or, if the property has already been sold, pays its actual value at the time of acquisition and compensates for losses. Only then does the buyer have a claim for the RUB 210 million against a company that by definition has no money.
Everything depends on the ground. If the transaction is set aside under paragraph 1 of Article 61.2, the claim ranks in the third priority of the register alongside ordinary creditors. If it is set aside under paragraph 2, meaning the buyer has been found a participant in asset stripping, payment comes only after third-priority creditors have been paid in full. In practice, little if anything is left by then.
That is why it is worth fighting to show a lack of knowledge even when the dispute over the price is going badly.
Investors should note another scenario. Suppose Vetrov had managed to resell the warehouse to a partner. The application would still be brought against Vetrov, and the property could be taken from the new owner only through a vindication claim, where the protection for good-faith purchasers applies.
How to protect the buyer before signing
Almost everything Vetrov needed in court could have been gathered in spring 2024 in a couple of weeks. This is usually part of business due diligence before a deal, except that you have to look through the eyes of a future trustee.
Start with Fedresurs. A creditor or the debtor itself must publish there an intention to file for bankruptcy at least 15 calendar days in advance, and with such an entry on record the buyer later has nothing to say in reply. Vetrov did check the commercial court case index, noticed two claims by suppliers and took them for routine disputes. The trustee then cited those very claims as grounds for saying the buyer should have been on his guard.
On price, an independent valuation as at the transaction date helps, alongside a scan of the listing and the correspondence on negotiations.
It makes sense to include in the contract warranties under Article 431.2 of the Russian Civil Code that there are no overdue debts and that no bankruptcy is planned. After the April ruling, this is no longer a formality.
Funds are best routed through a letter of credit or escrow, with part of the sum sent directly to repay the seller’s secured loan. If the proceeds really reached the creditors, it is much harder for the trustee to argue harm.
And be careful with leasebacks. The seller’s continued use of what it has sold is listed in paragraph 2 of Article 61.2 among the signs of an intent to harm creditors. That does not prohibit sale and leaseback, but the rate and the payments must be genuine.
The application is already in court: where to start the defence
With the calendar. Count from the date the bankruptcy petition was accepted, not from the opening of bankruptcy proceedings: a transaction more than a year old deprives the trustee of the most convenient ground. Next comes the limitation period: one year from the moment the trustee learned or should have learned of the grounds. The court will not apply it of its own motion; a party to the dispute must raise it.
From there we work backwards: what the trustee must prove and what the trustee does not have. There is more on our page about challenging transactions in bankruptcy, and the asset-stripping case shows how the same tools work from the creditor’s side.
If the transaction has already been set aside, it is important to prevent the property from being sold prematurely: in that same apartment case, in March 2026, the Supreme Court prohibited an auction until the complaint had been heard.
New rules lie ahead. The main part of Federal Law No. 253-FZ takes effect on 27 July 2027 and will bring debt restructuring for companies. If such a case is terminated and a new one opened within about three months, the suspect periods, judging by early commentary, will be counted from the first case.
In September 2026 the court of first instance ruled against the trustee in the warehouse dispute: an expert valuation as at the contract date came to RUB 265 million. The trustee has appealed, but the conversation is now a very different one.
Frequently asked questions
How far back can transactions be challenged in bankruptcy?+
Undervalued transactions: one year before the petition was accepted and afterwards. Transactions harming creditors: three years. For preferences the windows are shorter: one month and six months.
Can a transaction be set aside if the buyer knew nothing?+
Yes, under paragraph 1 of Article 61.2, if the transaction was concluded within the year and the terms were significantly worse than market terms. But the court assesses the circumstances as a whole, including how reasonably the buyer acted.
How long does the trustee have to challenge a transaction?+
One year from the moment the trustee learned or should have learned of the grounds. A party to the dispute must raise the missed deadline.
Will the buyer get the money back?+
Only through a claim against the debtor and only after the property has been returned. Under paragraph 1 of Article 61.2 this is the third priority of the register; under paragraph 2 payment comes after it.
Need your transaction assessed?+
Leave a request: a bankruptcy lawyer will review the contract, dates and payments and tell you how vulnerable the transaction is.