YOUNG SCHOLAR’S TRIBUNE

Non-competitive contesting of debtor's transactions as one of the tools to protect the interests of creditors

Abstract

Due to the increasing debt burden among individuals in the Republic of Kazakhstan, every day debtors, individuals and legal entities find sophisticated ways to repay debts or illegally withdraw their property, as long as the debtor is not yet declared bankrupt. One of the indicators of such actions is that the director writes out a large premium to himself, despite the presence of overdue obligations to creditors. On the part of legal entities, usually the participants of a limited liability partnership decide to charge themselves dividends in large amounts, adjusting the financial statements of the organization, thereby intentionally not reflecting the existing debt. On the part of individuals, offenses in the form of the donation of property are often traced, despite the existence of debts to creditors. In this regard, one of the tools proposed in the article for the return of funds lost by the creditor is the use of non–competitive contesting of the debtor's transactions, meaning by it pre-bankruptcy contesting of the debtor's transactions, in the case when the debtor intentionally withdraws property by registration to its affiliates, despite the debt, and the creditor, in turn, disputes these transactions. They also use the term «out-of-bankruptcy dispute», emphasizing that the debtor's transactions are disputed not by the bankrupt manager, but by the creditor himself. This article, I believe, will be useful not only to creditors, but also to law enforcement agencies, since, for example, when a corrupt official receives a bribe, it is not uncommon for him to actively withdraw funds by buying property or selling it. In the presence of such a tool as non-competitive contesting of transactions, contesting such transactions can lead to the effectiveness of returning the withdrawn funds to the state account. Of course, the institution of non-competitive challenging is still young and requires constant development and improvement, and thanks to daily practice it becomes obvious that the results will lead to positive changes in reforming not only national legislation, but also the development of entrepreneurship in general, as well as increasing the level of justice in society. The normative basis of the work was the works of scientists from foreign countries devoted to various aspects of the problem under consideration, as well as regulatory legal acts of the Republic of Kazakhstan.