Arbitration court opens bankruptcy proceedings at Luzhsky Meat Processing Plant

Experts believe that the bankruptcy procedure will become a serious obstacle to the investor, the Novosibirsk corporation Transagro, which acquired the asset in November 2022 and at the same time announced its intention to allocate 500 million rubles for its modernization, entering production.

In July, co-owner of Transagro LLC Viktor Feller told the media that the project had been suspended and the company was going to appeal the seizure of the property.MEAT processing plant as part of the bankruptcy proceedings of the Luga Feed Mill Plant (LKKZ). 

The Luzhsky Meat Processing Plant production complex was removed from the bankruptcy estate and sold at auction, but was subsequently still subject to interim measures. The owners of Transagro consider this illegal. In addition, the LKKZ bankruptcy case includes a claim for recovery of 12 million rubles in damages from the Novosibirsk corporation.

The opening of bankruptcy proceedings provides grounds for challenging the debtor’s transactions, including the sale of real estate and equipment, says Sergei Bakeshin, advisor and HEAD of dispute resolution and bankruptcy practice at the Maxima Legal law firm.

According to him, if the transaction was concluded at a public auction during enforcement proceedings, it will be quite difficult to challenge it, however, such a possibility exists. However, additional grounds will be required - for example, unequal counter-provision or preferential satisfaction of the claims of one creditor compared to others

Veta Group forensic expert Alexander Terentyev said that if any assets of the debtor were encumbered with security measures, then after declaring it bankrupt, the encumbrance is removed, the property is returned to the bankruptcy estate, and the owner and management are deprived of the opportunity to manage the enterprise. LMK has a chance to continue working if the property is sold in one or several large lots under the control of the new owner. Otherwise, it will be divided into smaller and smaller lots until it is sold in parts.

Partner of the Pen & Paper Bar Association Sergey Uchitel reminded: the main task of the bankruptcy trustee is to form the bankruptcy estate for settlements with creditors. There are special procedures for this: in particular, challenging suspicious transactions of the debtor. He noted that any sensible investor, before investing in the development of an asset, should assess all possible risks (and the seizure of property, undoubtedly, refers to risk factors). Now it is important for the Transagro corporation to assess the likelihood of a dispute being resolved in its favor on the merits, within the framework of which interim measures have been taken. In the absence of an application to challenge the transaction, this is not possible, the lawyer stated.