Current Issues of Enforcing the Claim Secured by Pledge Formed by Operation of Attachment (Para. 5 Article 334 of the RF Civil Code) When the Owner of the Seized Property is Bankrupt

Abstract

The article provides considerations in favor of an approach under which the new version of the RF Civil Code, giving the right of foreclosure to a person who has gained an attachment of the thing as an interim measure, cannot be interpreted as giving the person an advantage in allocating the proceeds of the sale of attached property in the event of bankruptcy of the owner of the thing. With reference to jurisprudence, as well as foreign sources, it is pointed out that the reverse decision would violate the fundamental principle of bankruptcy law, i.e. the principle of equality of creditors (pari passu). It is reported that in foreign jurisdictions, from where the "judicial lien" is borrowed, there are balancing elements that do not violate the principle of equality of creditors. In addition, the author provides arguments concerning unfairness in the totality of spreading grounds for providing a deposit. To this end, the author analyzes and evaluates arguments in favor of equality of preferential creditors: The bargain argument and, associated with it, the rate argument, the new value argument and notion argument. It is shown that providing a deposit using attached property does not withstand the test.