Consideration and protection of infringed rights in a bankruptcy case has certain characteristics that differ from litigation. This is primarily due to the specifics of bankruptcy proceedings, which consists in the use of special methods of protection of its subjects, procedures, participants, stages and other elements that distinguish this proceeding from the claim.
Such methods include the institution of invalidation of the debtor’s transactions in the bankruptcy case, which is a universal remedy for insolvency and part of a single mechanism for legal regulation of insolvency.
Bankruptcy law sets out special rules and procedures for invalidating transactions entered into by a debtor in respect of whom bankruptcy proceedings have been instituted.
Such rules are aimed at protecting the rights and interests of creditors and create conditions for the maximum possible satisfaction of monetary claims at the expense of the debtor’s property.
The debtor’s transactions, which reduce his own assets, are subject to assessment for the presence in the debtor’s actions of signs of concealment or removal of the debtor’s property. Such actions are usually aimed at harming the rights and interests of creditors, as they deprive them of the opportunity to satisfy their claims at the expense of the debtor’s property.
The period of 3 years preceding the opening of bankruptcy proceedings is the so-called “suspicious period”, within which the debtor is most likely to commit transactions indirectly aimed at harming the debtor’s creditors.
Debtor’s agreements made during the “suspicious period” for the alienation of property at reduced prices or the alienation of gratuitous claims or made between interested parties that harm the interests of creditors – are subject to recognition by the court as invalid.