Yulia Karpichko comments for “The Lawyers Newspaper”: The Supreme Court focuses again on the problems of motivation of security transactions

The court explained that in order to establish the abuse of secured transactions, there must be a strong argument that the conduct of the bank and the guarantor deviates significantly from the standards of reasonable and good faith behaviour.

Yulia Karpichko, a lawyer of the ART DE LEX legal firm, supposes that the benefit of the RF SC legal stance lies in the fact that in the process of checking the credit relations in terms of abuse of the rights shortly before bankruptcy, it is necessary to assess not only the financial capacity of the main debtor and the guarantor (or the pledgee), but also that of the group of companies to which the debtor belongs and which has provided the security for the loan. “This idea is clarified by an example of the structure of common business operated by a group of persons, where borrowed funds are granted to one member, whereas main assets are concentrated in the hands of other members”, she points out.

The full version of the article is available here.