The Commercial Cassation Court Within the Supreme Court Clarified the Procedure for Considering Simultaneously Submitted Applications of Creditors for Opening of Bankruptcy Proceedings

The Commercial Court of the Luhansk region by a ruling that was upheld by the decision of the Eastern Commercial Court of Appeal, in particular, opened proceedings in the case of the bankruptcy of PJSC Alchevsk Metallurgical Complex, recognized the claims of the initiating creditor LLC Eridius, introduced the procedure for disposing of the debtor's property, appointed an executor, decided to consider the monetary claims of the creditor MARGIT HOLDINGS LIMITED against the debtor, contained in the applications attached to the case file, at a preliminary court hearing in the manner prescribed by Art. 47 of the Code of Ukraine on Bankruptcy Procedures.

The Judicial Chamber on Bankruptcy Cases of the Commercial Cassation Court within the Supreme Court upheld the said decisions in view of the following.

The initiating creditor, who was the first to file an application for opening bankruptcy proceedings before the day the Unified Judicial Information and Telecommunication System began to function, if such an application is justified, has legitimate expectations of the appointment of an arbitration manager indicated in his application, which is directly consistent with the provisions of para. 2-1 of the final and transitional provisions of the Code of Ukraine on Bankruptcy Procedures.

Considering the provisions of para. 1, part 3 of Art. 34, part 8 of Art. 39 of the Code of Ukraine on Bankruptcy Procedures, it can be asserted that the initiating creditor, who was the first to file an application for opening bankruptcy proceedings, if such an application is justified, has legitimate expectations that in the ruling on opening bankruptcy proceedings, his creditor claims will be indicated with the determination of their amount.

Simultaneous consideration of applications for opening bankruptcy proceedings, provided for in part 4 of Art. 39 of the Code of Ukraine on Bankruptcy Procedures, consists in the fact that in the case when, before the preparatory hearing, the commercial court received several applications from various creditors to open bankruptcy proceedings against the same debtor, the commercial court at the preparatory hearing considers the first one received and only after establishing the lack of substantiation (the need to return without consideration) of the first application it considers the merits of the following applications for the opening of bankruptcy proceedings.

The above indicates that the provisions of part 5 of Art. 38, part 4 of Art. 39 of the Code of Ukraine on Bankruptcy Procedures determine the course of action for a commercial court in a preparatory hearing, which is considering several applications for opening bankruptcy proceedings against the same debtor, received from different creditors, provided that one of the applications (which was filed first) is returned without consideration.

The provisions of Art. 38 of the Code of Ukraine on Bankruptcy Procedures do not determine the substantiation of an earlier filed application for opening bankruptcy proceedings to applications filed later as a basis for returning an application for opening bankruptcy proceedings.

Since applications for opening bankruptcy proceedings filed later are not subject to substantive consideration at the preparatory hearing due to the substantiation of the previously filed application for opening bankruptcy proceedings, and also in accordance with part 1 of Art. 38 of the Code of Ukraine on Bankruptcy Procedures they cannot be returned without consideration (they shall contain information on the size of the creditor's claims against the debtor for the fulfillment of the requirements of para. 1 part 3 of Art. 34 of the Code of Ukraine on Bankruptcy Procedures), then to comply with the provisions of part 2 of Art. 47 of the Code of Ukraine on Bankruptcy Procedures the monetary claims of creditors to the debtor contained in the statements on the opening of bankruptcy proceedings attached to the case materials, which were received later, should be assigned for consideration in the preliminary hearing.

The text of the Resolution of the Commercial Cassation Court within the Supreme Court of July 06, 2022, in case No. 913/288/21 can be found at the following link - https://reyestr.court.gov.ua/Review/105458876.

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