Remuneration to the bankruptcy trustee includes additional payments based on the results of his activities and determined by the creditors' committee in the amount of no more than seven percent of the funds allocated to satisfy creditors' claims, net of administrative expenses.
The bankruptcy trustee of S. E. LLP filed a lawsuit challenging the actions of the Department of the Committee for Work with Insolvent Debtors of the Ministry of Finance of the Republic of Kazakhstan for the Aktobe region (hereinafter referred to as the Department) by refusing to approve the liquidation report regarding additional payments to the bankruptcy trustee in the amount of 1,189,222 tenge and forcing them to approve the final report in this part. In substantiation, she indicated that additional payments were made in accordance with article 69 of the Law "On Bankruptcy" (hereinafter referred to as the Law). By the decision of the specialized interdistrict Economic Court of Aktobe region dated May 11, 2012, the application was satisfied with the assignment of the Department's responsibility to eliminate the violation. By the decision of the Appellate judicial board of the Aktobe Regional Court dated July 03, 2012, the court's decision remained unchanged. By the decision of the Cassation judicial board of the Aktobe Regional Court dated August 08, 2012, the court's decision and the decision of the appeals board remained unchanged. In the protest, the Prosecutor General of the Republic of Kazakhstan proposes to cancel the judicial acts that took place in the case and make a new decision to dismiss the application. He indicated that during the bankruptcy proceedings, the claim of the creditor of the Aktobe City Tax Administration was not satisfied, additional payments are not expenses that are covered out of turn, therefore their accrual is unlawful.
In his response to the protest, the bankruptcy trustee, E., asked for the judicial acts to be upheld, considering them legitimate and justified. The supervisory judicial board upheld the decision of the specialized interdistrict economic court of the Aktobe region, the decisions of the appellate and cassation judicial boards of the Aktobe Regional Court in this case, and dismissed the protest of the Prosecutor General of the Republic of Kazakhstan on the following grounds. As can be seen from the case materials, by the decision of the specialized interdistrict economic court of the Aktobe region dated June 21, 2010, LLP "S" was declared bankrupt, by order of the Department dated July 23, 2010, the bankruptcy trustee appointed E. The Creditors' Committee was formed from a representative of the Tax Administration for the city of Aktobe. On March 05, 2012, the bankruptcy trustee submitted the final report to the Department. By letter dated March 06, 2012, the Department refused approval and returned the final report.
Remuneration to the bankruptcy trustee includes additional payments based on the results of his activities and determined by the creditors' committee in the amount of no more than seven percent of the funds allocated to satisfy creditors' claims, net of administrative expenses.
In particular, it is indicated that it is necessary to return the funds received by the bankruptcy trustee to the bankruptcy estate in the form of additional remuneration and send them to repay the creditors' claims of the corresponding queue. This requirement is justified by the fact that, in accordance with paragraph 2 of Article 69 of the Law, the accrual of additional expenses and their payment without full repayment of all queues is premature and unlawful. The actions of the Department in this regard were challenged by the bankruptcy trustee in court. According to paragraph 2 of article 69 of the Law, remuneration to the bankruptcy trustee includes, among other things, additional payments made based on the results of his activities and determined by the creditors' committee in the amount of no more than seven percent of the funds allocated to satisfy creditors' claims, minus administrative expenses. Thus, the Law does not provide that the bankruptcy trustee has the right to receive additional payments only after full repayment of all accounts payable.
The case materials established that on July 31, 2010, an agreement was concluded between the bankruptcy trustee and the creditors' committee to conduct bankruptcy proceedings, clause 2.1.3 of which establishes the bankruptcy trustee's right to receive current and additional payments from the bankruptcy estate of the liquidated enterprise prior to settlement with creditors. It follows from clause 2.3.8 of the agreement that the creditors' committee has the right to determine the amount of additional payments to the bankruptcy trustee (no more than seven percent of the value of the sold bankruptcy estate, minus administrative expenses) differentially, depending on the completeness of repayment of creditors' claims, as well as taking into account the volume and composition of the formed bankruptcy estate, accounts payable, and recovered accounts receivable.
In accordance with clause 3.2 of the agreement, the amount of additional payments is seven percent of the repaid amount of creditors' claims. According to the results of the bankruptcy proceedings, the requirements of the tax authority for the fourth stage (in the amount of KZT 13,526,347.25) and for the fifth stage – in the amount of 41 percent (in the amount of KZT 7,898,190), for a total of KZT 21,424,537 were fully satisfied. Additional payments to the bankruptcy trustee do not exceed the amount established by Law, taking into account the amount aimed at satisfying the creditor's claims. The protest also states that the court, in violation of Article 222 of the CPC, in the operative part of the decision, the actions of the Department were not recognized as illegal, while the application was satisfied. However, in this case, the court made a mistake that does not affect the substance of the decision. This typo may be corrected in accordance with the procedure provided for in Article 230 of the CPC. In such circumstances, the judicial acts in this case are subject to be left unchanged, and the Prosecutor General's protest is not satisfied.
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