A court in Ukraine has ruled against a local firm that was trying to assert its right over a $45 million (€33.7 million) debt linked to a shopping mall in central Kiev that formerly belonged to the family of bankrupt businessman Seán Quinn.
The ruling is the latest in a series of developments this year that have favoured the now-liquidated Irish Bank Resolution Corporation in its ongoing battle with the Quinn family.
It effectively eliminates one of the last remaining legal obstacles to the IBRC exercising its nearly 93 per cent shareholder rights over the shopping mall the Quinn family had pledged as security for €2 billion in borrowings from Anglo Irish Bank, later subsumed into the IBRC.
However, the whereabouts of $15 million in rental income the mall earned in the period the State-owned bank was trying to assert its control over the property remains unclear.
The Kiev Appellate Commercial court struck down Ukrainian brokerage Elegant Invest’s appeal to have its right to the $45 million debt reinstated over the Ukrainian mall.
The ruling entered into force a lower court's ruling in July that invalidated a series of debt assignments that began when a Northern Ireland company owned by the Quinn family, Demesne Investments Ltd, assigned its right to the debt to a British Virgin Island company, Lyndhurst Development Trading Ltd.
Elegant has 20 days to appeal the ruling to the highest commercial court. Arsen Miliutin, senior associate at Egorov Puginsky Afanasiev & Partners, which represents IBRC, said he expects the brokerage to appeal. In June a court in Kiev upheld a Belfast High Court decision the debt assignment from Demesne was "null and void".
Debt transfer
Ukrainian courts, despite a court injunction in Northern Ireland, allowed Lyndhurst to transfer the debt to Elegant Invest, via a firm called Zenit.
IBRC battled for almost two years to wrest control of the mall and only started to win legal battles early this year. "Right now the priority for us is the task of recovering the shopping mall's assets that were illegally transferred to third parties in the sum of $15 million in 2011-2012," said Rostyslav Levinzon, chairman of Ukraina mall's management company.
His appointment, at the request of a share receiver in Sweden who was in turn appointed at the request of Anglo Irish Bank, took more than a year to implement and was resisted by the management that had been in place when the mall was run for the Quinn family.
Mr Levinzon said the rent had gone missing when the mall was under its former management , with $5 million each going to Lyndhurst, Zenit and Elegant Invest.
The Quinn family has said the former mall manager, Larissa Yanez Puga, had stopped working in its interest at some stage after the family began to implement its plan to put pledged foreign assets beyond the bank's control.
