The Supreme Court has decided the fate of the shares of the Russian joint-stock company, owned by a US entity, which was liquidated 24 years ago

On January 31, the Supreme Court made a decision in the case No. A40-146631/2021 and signed Ruling No. 305-ES22-13675 on the claim of the Russian JSC against the company responsible for accounting for its shares, regarding the fate of securities that previously belonged to an American company which was liquidated more than 24 years ago.

Igor Gushchev, Senior Partner of the Duvernoix Legal law firm, said that the key issue in the situation under consideration was the distribution of the burden of proof between the parties. "The court clarified that the applicant should not prove the fact of the absence of legal successors of the liquidated shareholder, thereby proving a negative fact. According to the court, in order to establish the validity of the requirement to appoint a procedure for the distribution of the discovered property of a liquidated legal entity, it is sufficient to prove the fact of its liquidation, and the absence of legal successors can be proved by the fact that none of the legal successors applied to the issuer for the transfer of shares, as well as to the registrar to open an account in the register of shareholders. In accordance with the procedure established by the Civil Code of the Russian Federation and the Law on joint stock companies, the issuer in this case can redeem shares by placing the redemption value on the notary's deposit. The position expressed by the Supreme Court simplifies the life of issuers, who will now find it easier to prove the fact that the liquidated entity has no legal successors, which in general does not exclude the possibility of some abuse of the rights of "dormant" shareholders, when their shares can be forcibly redeemed by issuers without their knowledge," he believes.