Upon transfer of an enterprise, the obligations of a bankrupt enterprise must be fulfilled

We successfully represented the bankruptcy trustee of a bankrupt company in a dispute over the transfer of a company. As a result, the bankruptcy estate will increase by almost 125,000 euros.

An important opportunity to increase bankruptcy assets

On behalf of the trustee in bankruptcy, we filed an action against a company to which business had been transferred from another already bankrupt company. In this case, there was already a court decision that had entered into force, ordering the first company to pay nearly 125,000 euros into the bankruptcy estate. However, this company went bankrupt during litigation and was transferred to the following company. When a company is transferred by a concealed transaction, its debts and the existing court judgments relating to it come with it. That is why we brought an action, in order for the court to establish the enforceability of the decision in respect of another company as a result of the transfer of the company. The court found that the company had been transferred and consequently the other company was liable for the liabilities of the bankrupt company. The court thus upheld the action and recognised the enforceability of the judgment against the bankrupt company in respect of the new company to which the bankrupt company had transferred funds to.

Significant court decision

The decision is important because the court confirmed the possibility of enforcing a final court judgment that has initially been taken against the transferor of the company, against the acquirer of the company. This provides for, among other things, an additional legal remedy in bankruptcy proceedings to protect the interests of creditors and the opportunity to increase the bankruptcy estate.

The decision is also important because the court explained that since the limitation period for a claim arising from a court judgment which has entered into force is 10 years, the period to enforce the claim arising from the decision which has entered into force against the transferee of the enterprise is also 10 years.

The decision has not yet entered into force and the dispute is likely to continue at the second-instance level.

Our services and client team

We have represented the client from the beginning of the dispute.

The client team includes partner Carri Ginter, the head of our Estonian insolvency and restructuring workstream Mari Agarmaa, and associate Liisa-Maria Puur.