Рroperty dispute about Invalidating Debtor’s Transactions in separate proceedings in bankruptcy cases

The article addresses the issue of the grounds for invalidating a debtor’s transactions in bankruptcy proceedings. It examines the problem of the invalidity of debtor transactions within the bankruptcy procedure in the context of Article 42 of the Code of Ukraine on Bankruptcy Procedures (CUBP) and the provisions of the Civil Code of Ukraine. The grounds for invalidity are analyzed and divided into general grounds – established by civil law (including abuse of rights, violation of the principles of good faith and reasonableness) – and special grounds, which are provided for by the specific norms of the CUBP and other legislation. Special attention is paid to the legal nature of fraudulent transactions, i.e., those concluded by or involving the debtor with the intent to divert assets and prevent the satisfaction of creditors’ claims. The special grounds outlined in Article 42 of the CUBP and Article 38 of the Law of Ukraine “On the Deposit Guarantee System” allow for the challenge of transactions made during the “suspect period” or those bearing signs of fictitiousness, as well as transactions concluded with affiliated persons, at undervalued prices, or without reciprocal performance. The article emphasizes the importance of fraudulence criteria developed through case law, such as the timing of the transaction, the identity of the parties involved, and the economic unreasonableness of the transaction. It is underscored that the good faith of the debtor’s counterparties and the economic justification of the transaction are key in determining whether it is valid or invalid. The author highlights the difficulty of proving the debtor’s intent to harm creditors, especially in cases where transactions are executed not directly by the debtor but through affiliated persons. A comparative analysis with German legislation is provided, where certain actions by the debtor are presumed fraudulent. Against this background, Ukrainian courts are required to thoroughly examine all the circumstances of a case, including the economic purpose of the transaction, the source of funds, and the actual existence of obligations. The article also considers the risks of excessively broad grounds for invalidating transactions, particularly in cases where the agreements were not directly made by the debtor but may have resulted from their influence or arrangements with affiliated parties. It concludes that either excessive formalism or excessive flexibility in the application of the law may undermine legal certainty and the interests of good-faith counterparties. The paper substantiates that effectively preventing abuse in bankruptcy proceedings requires a balance between a formal legal approach and a flexible interpretation of legal norms, an analysis of the economic substance of transactions, identification of connections between parties, and an expansion of the debtor’s duty to disclose information about affiliated persons.