FBK Legal Practice Head Vladislav Korneychuk on Court Ruling: Affiliated Status Does Not Presume Compensatory Financing

PRObankrotstvo reports that when determining whether a loan qualifies as compensatory financing, courts should look into the debtor's financial state at the time the loan was received and subsequently repaid (Case No. A72-3002/2024).

Vladislav Korneychuk notes:
‘The court ruling serves as an important reminder: subordination is unjustified without an investigation into the actual terms of the loan and the financial context. Affiliated status alone does not create a presumption of compensatory financing. The ruling consistently applies the clarifications of the Supreme Court of the Russian Federation (Section 3.1 of the Review), emphasising that the decisive factor for determining the priority of claims is precisely an analysis of the circumstances under which the loan was issued to the controlled entity’.