We successfully represented Alfa Bank, a creditor of Arvi ir ko, in a case concerning annulment of company sales transactions by Arvi ir ko. A panel of judges of the Lithuanian Court of Appeal ruled to annul the sale of Lietuvos cukrus, Rietavas veterinarinė sanitarija and Arvi kalakutai to Cypriot companies. This court decision will enable creditors to continue recovering their debts.
Court recognizes indirect creditors’ right to challenge debtors’ transactions
Comments partner Laurynas Lukošiūnas, who represented Alfa Bank in court: “The Lithuanian Court of Appeal found that the transactions were concluded unfairly, at non-market prices and without real payment for the shares. On both sides of the transactions, transaction-related decisions were made by the same group of persons – V. Kučinskas and people from his circle. Furthermore, the court found that the transactions were unprofitable for Arvi ir ko, with the aim of avoiding settlement with creditors by transferring valuable shares to the ownership of newly created Cypriot companies, regardless of their solvency and links.”
The Lithuanian Court of Appeal has developed new case law that is important not only in this specific situation, but also for the whole market. The court recognized for the first time the right of indirect creditors to challenge debtors’ transactions under certain circumstances.