The Value of a Share upon Withdrawal from a Company Is Not a Creditor’s Claim in Bankruptcy Proceedings — Conclusion of the Supreme Court

A claim by a former participant of a company for payment of the value of their share in the debtor’s charter capital cannot be considered either a competitive claim or a current claim.

By its nature, such a claim constitutes a corporate property claim that may be satisfied only from the property remaining after settlements with all creditors and therefore is not subject to inclusion in the register of creditors’ claims in bankruptcy proceedings.

This conclusion was reached by a panel of judges of the Commercial Cassation Court within the Supreme Court in case No. 902/25/24.

Case Background

After the initiation of bankruptcy proceedings against the company, an individual filed an application with the commercial court seeking recognition of monetary claims against the debtor. These claims consisted of the unpaid value of their share in the company’s charter capital following their withdrawal from the list of participants.

The court of first instance left these claims without consideration. The appellate court agreed that the claims should not be included in the register of creditors’ claims but modified the decision and rejected them, noting that the court must either recognize the claims or reject them.

Disagreeing with the decisions of the lower courts, the former participant filed a cassation appeal with the Supreme Court of Ukraine.

Conclusions of the Supreme Court

The Supreme Court dismissed the cassation appeal but amended the reasoning of the appellate court’s decision and formulated the following key legal positions:

• The right of a former participant to receive payment for the value of their share is a form of exercising corporate rights. Although such a claim has a monetary expression, it is not equivalent to a monetary obligation of the debtor arising from a civil law contract and therefore does not constitute a creditor’s claim in bankruptcy proceedings.
• From the moment bankruptcy proceedings are opened, all property of the debtor (including its own capital) forms the liquidation estate, which is primarily intended for satisfying the monetary claims of creditors. Company participants — both current and former — may claim only the property remaining after settlements with all creditors.
• Paragraph 14 of Article 39 of the Code of Ukraine on Bankruptcy Procedures explicitly distinguishes the claims of founders (participants) regarding the return of contributions or payment of the value of shares from creditors’ claims. Such claims may be satisfied only from the property remaining after creditors’ monetary claims have been satisfied and do not constitute either competitive or current debt.

Thus, the opening of bankruptcy proceedings changes the manner in which the former participant’s right is exercised: it becomes a right to a share in the potential liquidation surplus after settlements with all creditors have been completed and cannot be realized by inclusion in the register of creditors’ claims.