First the return of assets, then subsidiary liability — an opinion

In bankruptcy cases, the legal entity’s ability to preserve and restore the financial foundation of its operations requires legal protection. In this regard, the right to solvency in which the legal entity is the aggrieved party should be an independent object of legal protection.

This view was expressed by an advocate and expert on the UNBA Committee on bankruptcy, chairman of the UNBA Committee on scientific and methodological development and professional expertise Artem Danilov in the article «The right to solvency of a legal entity as an independent object of legal protection in bankruptcy», published in the journal «Economics and law» No. 3/2026. The author notes that the original idea of recognizing the right to solvency and a legal entity as an aggrieved party belongs to a judge of the Civil Chamber of the Supreme Court Oleg Vaskovsky.

The author links solvency to the property autonomy of a legal entity — its ability to independently fulfill obligations, maintain the separation of its property, and participate in civil transactions. The withdrawal of assets, the artificial accumulation of debt, or the concealment of property can undermine this foundation. Therefore, he views driving a debtor into bankruptcy as an encroachment on the debtor’s own interest in preserving and restoring solvency.

In the advocate’s opinion, the transition to liquidation changes the form of such protection: its goal becomes the fullest possible restoration of the debtor’s property within the liquidation estate. Thus, priority is given to means of direct property restoration: declaring transactions invalid with the return of property, reclaiming property, recovering its value, collecting receivables, and obtaining compensation for losses.

A. Danilov assigns a residual role to subsidiary liability: it is intended to cover any shortfall in the liquidation estate that could not be eliminated by such means. He explains that without ascertaining the possibilities for asset recovery, it is impossible to properly determine the amount of the claim. Premature recourse to this mechanism creates the risk of double recovery if the assets or their value are subsequently recovered by other means.

The expert cautions that the proposed sequence stems from the purpose of the remedies and is not a priority order explicitly established by law. He substantiates his position with an analysis of the Ukrainian Code of Bankruptcy Procedures, Supreme Court case law, and academic research.

The full text of the article is available at this link.