Moving customers, assets and revenue-generating operations to another legal entity while leaving debts with the old company may support subsidiary liability. But a shared brand, address or movement of employees is insufficient on its own: specific conduct, benefit, control and the connection to creditors’ inability to obtain payment must be reconstructed.
This guide concerns a bankruptcy dispute over an abusive transfer of business activity. A lawful enterprise sale, asset substitution, reorganisation and ordinary competition have their own rules. Creating a new company does not itself prove wrongdoing.
↗ Revenue-generating activity
Identify what moved: assets, contracts, orders, infrastructure and management.
⚖ Beneficiary
Identify who received a substantial advantage and its economic explanation.
🔎 Consequences
Examine changes to the old company’s assets, liabilities and ability to pay.
Why moving operations may matter
Paragraph 7 of Russian Supreme Court Plenum Resolution No. 53 describes, among other situations, a business structure that redistributes aggregate income to certain persons sharing a common interest while concentrating the main debt burden on the debtor. A beneficiary of that structure may be presumed to be a controller. To rebut the presumption, the beneficiary must substantiate the actual economic substance of the income-generating operations and reasonable economic grounds for the benefit received.
Another paragraph 7 example concerns receipt of a substantial asset that left the debtor through a director’s bad-faith conduct to the detriment of the company and creditors. A good-faith purchaser may demonstrate payment and terms ordinarily used in comparable circumstances. Both situations require examination of facts, rather than kinship or a common shareholder alone.
Establishing controlling-person status does not replace the grounds for recovery. Article 61.11 asks whether the defendant’s conduct caused the inability to satisfy creditor claims in full. Paragraphs 16–18 of the Plenum require inquiry into causation and the material effect of that conduct; ordinary business risk does not by itself justify liability.
If objective bankruptcy arose earlier, inquiry does not end there: Article 61.11(12) addresses subsequent material deterioration. However, a minor deterioration or particular losses cannot be turned into recovery of the entire debt balance without analysis. The general grounds are explained in subsidiary liability of controlling persons.
Evidence of an actual transfer of business
Prepare a before-during-after chronology and a separate map for each person. Do not rely only on photographs of signs. Establish ownership of assets and rights, actual contract performance, recipients of payments, management decisions and consideration supplied.
| Area | What to compare | Further questions |
|---|---|---|
| Assets and infrastructure | Inventories, title, contracts, handover records and actual use | Price, payment and equivalent value retained by the debtor |
| Customers and contracts | Correspondence about changing provider, new contracts, orders and performance | Consents, independent customer choice and legal grounds for the change |
| Money and income | Payments before and after, recipients and the source of work or goods | Actual costs and economic substance, rather than turnover alone |
| Employees and management | Transfer dates, authority, instructions and decisions | Freedom to change jobs and who actually determined conduct |
| Debts and distress | Liabilities, assets and payment capacity at relevant dates | The link to deterioration, other causes and compensating receipts |
Each indicator may have an ordinary explanation. Employees may change jobs, customers may change suppliers, and operating in the same industry does not mean appropriating another business. Evidential weight comes from a verifiable combination: who organised the conduct, what the debtor lost, who benefited and why creditors became unable to obtain performance.
For a corporate group, use a separate map of each group member’s debts and assets. Group membership does not automatically create a single bankruptcy estate.
What a defendant can provide
Address the particular transfer alleged. The new company’s formal independence does not explain disputed payments and assets. Conversely, the applicant cannot replace all liability conditions with evidence of affiliation.
- Consideration: contracts, contemporaneous valuation, actual payment and the debtor’s use of what it received.
- Economic reasons: the new provider’s independent resources, allocation of risks and expenses, and the parties’ actual functions.
- Customer history: dates and grounds for ending old contracts, new orders and counterparties’ independent decisions.
- Limits of influence: authority, decisions, control period and absence of involvement in particular conduct, where supported by evidence.
- Causes of distress: financial records, external circumstances and the disputed operation’s effect on payment capacity.
Do not invent a business purpose after the claim arrives. Contemporaneous documents, substantiated payments and a coherent explanation of actual operations are more useful. An independent purchase on ordinary terms and receipt of a substantial asset through an abusive structure are different factual models.
A shared telephone number or website may help establish a connection, but it does not itself show who owned contracts and assets, who bore costs or what the debtor lost. Link the indicator to a specific asset, period and document instead of treating it as proof of every condition.
Distinguishing turnover, harm and the claim amount
The new company’s revenue is not automatically the old company’s loss, and an asset’s book value is not necessarily its market value. Article 61.11 supplies specific rules for the amount and permits proof of substantially smaller harm. Check outstanding creditor claims, their connection to the defendant’s conduct and payments already made.
A hypothetical reconciliation of one asset: suppose the substantiated market value at transfer was RUB 5,000,000 and the debtor actually received consideration of RUB 2,000,000. The difference, RUB 5,000,000 − RUB 2,000,000 = RUB 3,000,000, may provide a reference point for examining this event. It is not automatically the subsidiary liability amount or the final damages figure.
Examine the valuation method, what was transferred, additional obligations and payments, effects on the overall business and the claim’s actual basis. If the same asset has been returned or its value compensated, the restored property cannot be treated as another independent loss. The calculation must exclude double counting.
Different remedies serve different purposes
| Issue | What must be identified | What is insufficient |
|---|---|---|
| Subsidiary liability | Control or the applicable presumption, conduct, inability to pay and amount | Creation of a new company alone |
| Losses from a particular event | Specific loss, grounds, causation and compensation already received | Equating every company debt to one transaction’s value |
| Challenging the transfer | The acts or transaction, grounds, parties and consequences | The label “business transfer” without legal classification |
| A lawful enterprise sale | Composition, sale procedure, price, performance and special procedural rules | Assuming all continuation of operations is prohibited |
Separate guides cover damages against a director, challenging a chain of transactions and sale of the debtor’s enterprise. They do not justify claiming every amount simultaneously without examining overlap.
Preparing a position
- Identify the debtor, transfer period and participants. Distinguish decision-makers from beneficiaries.
- Map assets, contracts, performance and money with precise dates and sources.
- Reconstruct the debtor’s financial position before and after; investigate other causes of distress.
- Compare control grounds, presumptions and liability conditions, addressing each defendant’s objections.
- Prepare separate calculations and mark overlap with asset-return or damages claims.
- Submit evidence and substantiated requests through the proper procedure, observing the particular case’s deadlines.
“During …, the debtor conducted … using …. Following …, assets/performance/payments moved to …. Supporting documents are …. The benefit … and presence/absence of consideration … should be assessed as follows …. The effect on payments to creditors is supported/disputed by …. The calculation accounts for … and excludes duplicate treatment of …”.
For an unavailable document, identify its holder, period, facts it would establish and obstacles to independent access. Do not replace a missing document with a confident assertion of wrongdoing.
Questions and legal sources
The new company uses the same brand. Is that already a business transfer?
It may indicate a connection, but it is not complete proof of liability. Examine assets, rights, management, performance, income and consequences for the debtor.
What if employees chose to move to a new employer?
That alone does not prove wrongdoing. It is considered with other facts; the reasons and independence of decisions require evidence.
Can the benefiting company be liable, rather than only a director?
Article 61.10 allows an individual or legal entity to be a controller, and paragraph 7 addresses the beneficiary-controller presumption. The particular claim’s conditions and grounds must still be established.
Does paying for the asset eliminate the risk?
Not automatically. Actual payment, price, terms, economic reasons and consequences are examined. Acquisition for consideration on ordinary terms can support a good-faith purchaser’s defence.
Is every business transfer a legal reorganisation?
No. Actual movement of operations does not automatically establish legal succession. Reorganisation, enterprise sales and asset substitution have their own conditions; the actual conduct requires legal classification.
Verified 26 October 2026: Article 61.10 and Article 61.11 of Federal Law No. 127-FZ, version 4 August 2026; Supreme Court Plenum Resolution No. 53, paragraphs 3–7 and paragraphs 16–18 and 20–23, version 23 December 2025. Future versions have not been applied.
Need to assess a transfer of operations?
An initial consultation can examine the map of operations, participants and evidence, then identify the appropriate remedy.