On the application of the construction of fraud transactions in bankruptcy cases

Abstract

The article considers the theoretical and practical aspects of the application of the construction of fraud transactions in bankruptcy proceedings. Attention is drawn to the fact that the bankruptcy legislation of Ukraine provides an important legal instrument – invalidation of the debtor's transactions committed during the so-called suspicious period (Article 42 of the Bankruptcy Procedure Code of Ukraine, hereinafter – KUzPB). The purpose of its application is to increase the liquidation estate of the debtor by returning to it the property transferred to others to protect the interests of creditors. Norms of Art. 42 of the Code of Civil Procedure (formerly Article 20 of the Law "On Restoration of Debtor's Solvency or Recognition of Debtor's Bankruptcy") is an economic remedy aimed at preserving the debtor's property and differs significantly from the general grounds and consequences of invalidity of transactions in civil and commercial law. Specified in Art. 42 of the Code of Civil Procedure, the grounds for invalidity of the debtor's transactions are special grounds for their invalidity, not related to defects of will or expression of will. It is determined that the universal sign of a fraud transaction is the fact of causing harm and the intention (intent) to harm the creditor, fraudatory transactions do not have any special features in a bankruptcy case. If the debtor's transaction has the appropriate characteristics and is subject to invalidation under Art. 42 of the Code of Administrative Offenses, this excludes the possibility of its qualification as fraudatory and invalidation as fraudatory. Along with this transaction, which is not subject to invalidation under Art. 42 of the Code of Administrative Offenses, but has signs of fraud, may be declared invalid by way of claim proceedings in the bankruptcy case in accordance with Art. 7 КУзПБ. The necessity of differentiation of transactions made in the suspicious period (Article 42 of the Code of Administrative Offenses), fraudatory transactions that may be declared invalid in accordance with Art. 7 KUzPB on the basis of Art. 3, 13 of the Civil Code and fictitious transactions (Article 234 of the Civil Code), and the inadmissibility of mixing these structures.