The newspaper «Business Petersburg» (DP) tells to its readers about our work. «The Arbitration Court of St. Petersburg and the Leningrad Region satisfied the application of Construction Company Monolit, LLC for interim measures in the framework of a tax dispute. Back in August, the company applied to the arbitration court, asking to invalidate the decision of the Interdistrict Inspectorate of the Federal Tax Service No. 24 for St. Petersburg, which accrued to it almost 140 million rubles in taxes, penalties and fines based on the results of an on-site tax audit. «The audit lasts more than 2 years. «Monolit» has repeatedly proposed concluding a settlement agreement, but this has not yet been done» Vasily Davydov, advocate, a member of the board of directors of the law firm DCO, LLC, who represents the company’s interests at court, told DP. We believe it is necessary to check the decision of the tax authority at court and hope that we will be able to achieve a reduction at the amount of claims. It is possible that it will be possible to conclude a settlement agreement at court».
Tax restructuring, obtaining a delay for payment of mandatory tax payments, contesting of results of a company office or in-house state tax body audits, suspending an execution of tax authority requirements, business acquisition and separation, seizure of assets of an unfriendly company or its director managing. At the course of daily work, when achieving positive results, our specialists continue to successfully support bankruptcy cases, corporate and tax disputes. We know how and what exactly needs to be done in this or that difficult business situation, which is why some our customers have been cooperating with our company for many years.
Our company always stands for a solution to solve any corporate conflict or dispute by means of negotiations. Inability of partners to agree, as a result, leads to end of a business or economic losses. In the course of a legal dispute that has ended in April, 2023, our experts invalidated the agreement on transfer of trademarks to a large manufacturing factory which produces artistic paints. As before, we offer to stop the conflict and conclude a settlement agreement, but representatives of an opposite side refuse and continue the dispute, which will lead to enormous losses for their principal.
Once again, taking into account arguments of our experts, the Cassation court (the third instance) did not agree with lower courts, cancelled all judicial decisions taken within the case in progress and sent the case for a new trial to the Arbitration Court of the Pskov Region. In its decision, the Cassation Court pointed out that the lower courts did not fully examine all arguments of our side, did not correctly apply current legislation, and therefore all decisions already taken in the case was illegal. Sorry for our opponents, the procedure of the execution of the decision has been suspended, and the case will be considered from the very beginning again.
It is very difficult to achieve imposition of interim measures, and it is even more difficult to cancel them. But in October, our specialists managed to prove to the court the groundlessness of an interim measures, and completely cancel them. Our client turned to us after the imposition of the interim measures at the court of first instance. The Court of Appeal upheld them, considering their necessity proven. However, the Court of Cassation did not agree with the lower courts, took into account our arguments and, resolving our petition on the merits, indicated that the lower courts did not fully examine all our arguments and did not correctly apply the current legislation.
Interim measures are temporary restrictions imposed by a court at request of a plaintiff in a form of seizure of property (including money), a ban on some actions, etc. In the course of day to day activity our specialists decided to ask a court to impose interim measures in the form of a ban on further alienation of disputed exclusive right to valuable trademarks. The court of first instance agreed with our arguments and fully satisfied our application for the imposition of interim measures. Despite a complaint of the other party to higher courts, both the court of appeal and the court of cassation also agreed with the given decision. The litigation process has just begun, but our client is completely sure that during the period of litigation his exclusive rights on trademarks are under reliable protection.
The next round table with participation of our specialists: «Subsidiary and other types of liability for accountants, CFO and other persons providing business management», organized with a support of the Audit Chamber of St. Petersburg, was held on July 5, 2022. The event, dedicated to current topical issue of subsidiary liability of persons who form reports and control the finances of a commercial enterprise, aroused great interest of practicing lawyers, auditors and employees of large enterprises. New jurisprudence, approaches to resolving disputes in bankruptcy cases, the procedure for referring one person to the circle of persons managing the debtor – all this became of a discussion among the round table participants. The presentation of the speech of our representative and judicial acts on the topic are available on our official page at social network VK.
We invite you to take part at the online Roundtable organized by our company together with the Audit Chamber of St. Petersburg: «Subsidiary and other liability for accountants, financial officers and other business management of commercial company». The free of charge event begins at 11:00 a.m. (Moscow) on July 5, 2022, detail information about it and registration are available on its official page. During the Roundtable, we will share our experience and talk about subsidiary and other types of liability of persons who prepare financial reports and control cash-flow of a commercial enterprise. This issue seems now the most relevant one, since zone of risk of bringing to subsidiary liability will now extend not only to the first persons of the debtor company, but also to accountants and other financial management.
Our company has got an assignment to provide legal support and protect of interests of a client at course of resolving a corporate conflict. Actually, the reason of the conflict is a successful manufacturing business created by two partners about already 20 years ago. Unfortunately, having carried out a plan and achieved significant results, the partners could not maintain business relations, their co-operation worsened and eventually escalated into the conflict. Such assignment is usually carried out by our specialists according to a certain methodology, which has been worked out in practice. Often a conflict ends in bankruptcy or complete liquidation of a business, therefore, when resolving such cases, we always try to find a compromise and achieve a peaceful agreement between the parties, but such outcome comes out extremely rare.
We always protect our clients at all levels of the judicial system and believe that any negative decision must be always appealed. And as it was already happened, such an approach brought us a success again – unlike the local courts, the Arbitration Court of the North-Western Region agreed with arguments of our specialists. The «friendly» creditor of the bankrupt company has been excluded from the register of creditors’ claims, and now his claim will be re-considered again. Guided by articles 286, 287, 289, 290 of the Arbitration Procedure Code of the Russian Federation, by its Resolution of March 24, 2022 in case No. A52-2502/2020, the Arbitration Court of the North-Western Federal Region has decided that both the decision of the Arbitration Court of the Pskov Region dated October 13, 2021 and the decision of the Fourteenth Arbitration Court of Appeal dated January 19, 2022 shall be cancelled completely. The whole case sends for retrial.
Our company took part at the annual conference «Bankruptcy-2022: key cases and new trends». During the event, organized by the newspaper Delovoy Peterburg on March 16, 2022, at the Saint Petersburg Hotel, took part leading experts as well as acting judges of the Arbitration Court of St. Petersburg and the Leningrad Region. One of the speakers was Mr. Sergey F. Markin, the Chairman of the Arbitration Court of the North-Western region, to whom our specialists managed to ask number of practical questions. New judicial decisions and approaches have significant impact on practice and require exchange of experience, communication with experts. Participation in such events allows us to get acquainted with our colleagues, to hear the opinion of judges, to ask questions.
We highly appreciate and thank administration of the newspaper Delovoy Peterburg for organizing such kind of events and inviting us to participate at them.
On February 25, 2022, managing partners of our law firm took part at the business breakfast «Russian tax legislation: new positions and well-forgotten old», organized by the newspaper Delovoy Petersburg. At the event, leading industry experts, together with representatives of the Federal Tax Office, discussed and commented daily problems of tax practice which affect on process of doing business, and also shared their experience in effective building a company’s tax strategy. Taking into account our long professional experience in protecting taxpayers during complex and desk tax-audits, results of judicial resolution of disputes with tax authorities and outcome of applications on imposition of interim measures, Vasilii Davydov, advocate, partner and one of the members of the supervisory board of our company, took an active part in dialogues with our professional colleagues and specialists from the Federal Tax Office.
In 2021, we held 126 court sessions and spent approximately 9,000 business hours rendered services for our clients, from our 28 new clients over the past year, 24 came from referrals on our company. The shortest and the best review following results of co-operation with our company in 2021 was left by an owner of a large international business, Mr. Evgeny Ugolev: «I came to these guys with a big problem, but went away with money on my bank account». In the first days of the new year, our company received a request to give an advice on taxation matter. During a meeting scheduled for already on the very next day, in process of dialogue with a German citizen, we discussed possibilities for reducing his personal and corporate taxes. The information received was of great interest to our guest and his Russian partner. We very much hope that as a result of our activity a new international company will be created in Russia soon.
It takes for our specialists almost three years to receive our client’s funds, which were held by his counterparty since a long time ago. After we had examined a situation in 2018, we realized that a company debtor himself will never be able to cover the debt, and stage-by-stage legal work term of which will be about 2-3 years is only possible option. Our client agreed an assignment, and finally it came out that besides to a director general of the debtor, it’s real beneficiaries, including a company registered in the special economic zone “Skolkovo” near Moscow, had been brought to subsidiary (personal) liability for the company’s debts. The main our achievement is that these new debtors have already paid off a big part of the debt to our client, and a peaceful agreement signed and certified by the court guarantees to him full settlement until May 2022.
On November 25, 2021, as a result of day to day activity of our company’s specialists, the Arbitration Court of St. Petersburg and the Leningrad Region satisfied a claim on recovery of 25 million roubles from JSC Metrostroy (underground construction monopoly in St. Petersburg, now in a process of bankruptcy) in favour of one of its contractors. In turn, the city tax authority, following our wishes and understanding perspectives to receipt funds into the state budget, postponed its intention to apply to the court with a claim on bankruptcy of a plaintiff – our client. Since the debt, now confirmed by the court’s decision, relates to current payments of the bankruptcy estate of JSC Metrostroy, we very hope to get this amount paid in full. Moreover, a similar case in our practice has already been in the bankruptcy case of Trade House Intertorg LLC (Family name chain of production stores).
Passivity of the owners, executives and, first of all, lawyers of a large construction company specializing in construction of railways to make precautions for incoming bankruptcy, determine the strategy of actions and build a line of defense for the management led to extremely unfavorable consequences for their clients. As a result of search and seizure of property of the debtor left without due management in bankruptcy procedure, carried out by our partners – a temporary, and later by a bankruptcy estate officers, a sale of the luxury apartment to one of the debtor’s employees was challenged. In the near future, few transactions of sale of vehicles will also be challenged, and management and founders, respectively, will face both soon personal liability for losses and subsidiary liability for the company debts.
In August 2021, the St. Petersburg Bar Association issued a decision to log in into the official register two new trainees of Vasily Davydov, attorney at law. Taking into account professional training of candidates and an experience gained as a result of working in our law company, we very hope that already on the next year young people will successfully pass a qualification exam and join professional advocates’ community. Thus, cooperation with DCO, LLC law office, participation in leading by us bankruptcy cases, tax disputes, support of business reorganization transactions, real estate sale-purchase deals or resolution of corporate conflicts allows young professionals not only to apply and improve their knowledge in practice. Our successful employees get an opportunity to obtain a status of an advocate or a bankruptcy real-estate officer, set in at the profession, and even later takes a position of a managing partner.
Support and protection of foreign businesses in Russia is still continued to be a main area of our legal activity. This time, timely appeal for legal assistance to our law company, strong analysis of judicial practice carried out by our specialists and revealing evidences of a defendant’s bad faith during the preparation of a petition for securing a claim convinced the judge who accepted the claim of necessity to impose interim measures and to issue an appropriate decree. It gave us a possibility to consolidate and reinforce a position of our client from Europe already at the beginning of litigation. In the future, if in course of the trial facts of falsification will be confirmed and more signs of a crime provided for by the Criminal Code of the Russian Federation will be found, we definitely make a statement as well to law enforcement body in order to initiate a criminal case.
A recession of the Russian economy, increasing of numbers of tax check-in and risks of doing business in Russia – and we are again providing legal services at the field of tax relations, carrying out legal assistance for a large construction company during a tax check-in initiated by the tax city inspectorate of St. Petersburg. The strategy developed for protecting our client’s interests in this case involves not only challenging a decision of the tax authority at the court, but also an attempt to conclude a peaceful agreement. So far, there is very little such practice, although current legislation allows a possibility of concluding an amicable agreement with the tax body. Taking into account our previous experience and negotiations with top representatives of the tax authority that have begun, we cautiously hope for a successful outcome in this case.
For the third year in a row, the Arbitration Court of the Kaluga Region has been considering a claim of an unscrupulous service provider against our client, a foreign company operating in Russia. The plaintiff decided to use the court in order to collect debt for actually not rendered services, but did not take into consideration how many circumstances are subject for investigation and proofing. Defending the defendant, our specialists have already held 30 court sessions in the Kaluga city.
Gradually, the case is nevertheless going to its logical conclusion – according to our opinion, the next court session, scheduled for mid-summer, may become a final one. Taking into account all materials of the case, conclusions of the expertise, testimony of witnesses questioned at the court room, and most importantly the lack of evidence of an actual services providing, our company still hopes that the court will make a fair and honest decision already in the first instance.
The European Court of Human Rights accepted for consideration a complaint of our client against the Republic of Finland. In a statement sent to Strasbourg in December 2020, our specialists pointed out on serious mistakes made by courts in Finland. Acceptance of the complaint to proceedings testifies a high level of professionalism of our colleagues in course of fulfilling given assignment and has already allowed to our client to suspend enforcement measures. However, it should be remembered that at any litigation process non one can guaranty one hundred percent winning result, and now our main task remains to support the complaint, to submit necessary documents and then to wait for a final decision of the international court in this particular case.
Another round table: «What one should know on bankruptcy when summing up results of a financial year?» took place in the Zoom conference room at 11 a.m. on March 17, 2021. During the round table, an issue on how results of an audit of annual financial statement are related to provisions of bankruptcy (insolvency) legislation and affected on processing of important management decisions by top manager or a board was discussed in details. The round table was held with support of North-West territorial branch of the Auditors’ self-regulatory association «Sodruzhestvo». One can read more about program, speakers and results of the event in its official press release on our official website.
Our company has fully completed and provided to our client from Europe a legal opinion prepared by experts of DCO, LLC law firm on perspectives for resolving a dispute arising in connection with violation by a charterer its obligations under a charter agreement and failure to pay to a ship-owner lease payments for a vessel, which operated at the Gulf of Finland and the Neva River. Regardless of fact that not all parties of an agreement are residents of the Russian Federation, according to the terms of the agreement, dispute must be considered by the Arbitration Court of St. Petersburg and the Leningrad Region. Our experts assess prospects for resolving the dispute in favour of our client as high ones and recommend him to file a suit immediately after submitting an official claim to the charterer.
The first days of the new year were incredibly successful for our law company. Despite the reversal of a case and cancellation of the decision in cassation, the Arbitration Court of St. Petersburg and the Leningrad Region again upheld our arguments and when the case was reconsidered, left the previous decision unchanged, thereby recognizing legality and validity of our client’s claims. A dispute in another case ended with peaceful agreement. This outcome of the case allowed parties to maintain business relations, in addition, the Plaintiff, represented at the court by our specialists, is already receiving payments in strict accordance with the schedule agreed by the parties in the peaceful agreement.
Having completed consideration of the case of our customer from Europe against local wine-producer manufactory, the Arbitration Court of St. Petersburg and the Leningrad Region not only satisfied given claim in full, but also recognized our requirement on payment of penalties for delays of financial transactions at the amount of EUR 65,000 justified and subject of satisfaction. Just before the court session, a Defendant unexpectedly refused to sign a peaceful agreement already agreed upon by the parties, and at the session tried to delay proceeding, confused the court by providing unreliable documents and information. Most likely that because of such behaviour of the Defender the court has satisfied our claim in full.
With a decision to free controlling persons of a manufacturing company from personal liability finally ended a dispute within the bankruptcy case, initiated by a request of one of its creditors. Despite of strong insistence of a head of the creditor and its lawyers, the court again disagreed with the arguments of the applicant and followed position given ahead by the defence team – lawyers from DCO, LLC law company. At the course of supporting bankruptcy of the manufactural since the moment of its insolvency, the latter managed to form a line of defence of a former manager as well as owners of the company, to help the bankruptcy estate officer collect and form bankruptcy estate, and to pay off priority debts.
On October 28, 2020, a regular Round Table «Claims of affiliated creditors at a bankruptcy case», organized both by the North-West territorial branch of the self-regulatory organization of auditors – association «Sodruzhestvo» and DCO, LLC law firm, happened online. Survey of participants confirmed not only a high relevance of the topic, but also high quality of preparation of the event, professionalism of the speakers and success of a format, which allowed to stay away from theoretical topics. According to them, the most interesting discussions concerned practical aspects of law enforcement, including practice on participation of the speakers in real bankruptcy cases of such large enterprises in St-Petersburg as Metrostroy JSC and Intertorg Trade House.
We kindly invite you to take part at the Round table «Claims of affiliated creditors in bankruptcy case». Meeting of participants happens in Zoom conference room online at 11:00 a.m. (Moscow time zone) on October 28, 2020. Organizers: North-West territorial branch of the Auditors’ self-regulatory association «Sodruzhestvo» and DCO, LLC international law company.
Representatives of the Russian Post still trying and continuing their attempts to bring to responsibility for activities of managers of this state owned joint-stock company, whose had lost more than 300,000,000 rubles as a result of their management, on our colleague, a bankruptcy real-estate officer. Having considered the complaint of the Russian Post and arguments of the officer’s defender – Vasily Davydov, attorney, the court of appeal came to a conclusion that the court of the first instance thoroughly and fully examined materials of the case, gave a proper legal assessment of all evidences, and applied applicable rules of the law, without allowing violations of procedural law. According to the appeal, all conclusions contained in the judicial act of the first instance correspond to factual circumstances of the case, and there are no any grounds for its cancellation.
15 court sessions, examination of documents and results of expertise, inquiries to Turkey, interrogations of witnesses and many other procedural formalities, which lasted 2 years and 9 months, were needed for a judge of the Arbitration Court of the Krasnodar region to resolve a dispute related to a claim filed against our Client. By the opinion of a plaintiff at the case, poor-quality product was delivered to him, but the court took into consideration arguments of DCO, LLC law firm’s specialists, made different solution and resolved the dispute in our favour. The claim forwarded by the plaintiff has been completely denied.
Welcome to the briefing «Subsidiary (personal) liability of chief accountants, financial directors, audit companies at the bankruptcy case». The meeting of participants will take place online (ZOOM meeting) at 11:00 o’clock (Moscow time) on June 30, 2020. Organizers: the North-Western territorial branch of the self-regulatory organization of auditors association “Sodruzhestvo” and DCO, LLC international law firm.
Welcome to the on-line Round table «Particularities of participation at a bankruptcy case», which happens at 15:00 o’clock on June 18, 2020. Organizers: The Union of Industrialists and Entrepreneurs of St. Petersburg, the North-Western territorial branch of the self-regulatory organization of auditors association “Sodruzhestvo” and DCO, LLC international law company.
With assistance of DCO, LLC law company, our colleague, an arbitration manager, one from the members of self-regulatory organization the Union of bankruptcy managers «Northern Capital», managed to prove legacy, good faith and reasonableness of all his actions made when fulfilling duties as a bankruptcy trustee. Initiator of the claim addressed to the bankrupt manager was the Federal State Enterprise «Russian Post», one from the creditors in this bankruptcy case. According a decision dated April 30, 2020, the Arbitration Court of St. Petersburg and the Leningrad Region had recognized the application of the Russian Post to recover from the manager damages at amount of 310,740,318 roubles 55 kopecks completely unreasonable.
Our law office continues to work in full compliance with the law requirements for entire quarantine period until April 30, 2020. All company management systems allow our lawyers to conduct their work duties as usual at a distance. We would like to remind on that in order to control a court case and avoid unpleasant surprises, it is necessary to monitor appearance of judicial acts, timely submit documents and send requirements to postpone court session or/and to schedule session in on-line regime. Taking into account complexity and uncertainty of the situation aroused, please, feel free to contact our office at any time of the day.
The management of DCO, LLC law firm have made a decision to represent the interests of a bankrupt manager at the dispute on recovering personally from him losses at the amount of 340 million roubles. We believe that a lawsuit filed by one from bankrupt’s creditors in connection, according the opinion of this particular creditor, improper actions performed by the arbitration manager during his managing a bankruptcy case is completely unfair and has definitely signs of abuse of the law. We believe that our company experience of protecting bankrupt managers in such situations will make it possible to prove to the court the groundlessness of the claim and not only gives a chance to remove requirements but later allows us to charge all legal expenses from the applicant.
On January 17, the first event of 2020 was held in the Finnish-Russian Chamber in St-Petersburg. The guests of the chamber from the Finnish state organization “Business Finland” told to the audience on support of the Finnish Government of foreign businesses start-ups, possibilities for launching and developing innovative and other perspective projects in that country. In their turn, participants of the round table from DCO, LLC international law firm reminded to all about difficulties and particularities of establishing business at the territory of any foreign country. According to our company experience, despite the comfort of living, possibility to get state financing and other prospects for entering the European market, not many investment projects in Finland are really successful. One can read about standard mistakes of Russian entrepreneurs at the pages of Fontanka electronic newspaper in the article of our colleague.
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