You're reading: Kyiv court postpones $45 million debt collection enforcement over Ukraina shopping mall

A Kyiv commercial court on March 26 granted a six-month postponement for the enforcement of a Ukrainian company’s $45 million debt claim over the lucrative Ukraina shopping mall located in the capital’s Victory Square.

The mall’s
management who represent
the interests of a state-owned
Irish bank that controls nearly 93 percent of the mall, said the court decision
“will end the fraudulent bankruptcy
of Univermag (Ukraina) and begin the final restoration of the legal rights of
the shopping mall’s owner – Quinn Holdings Sweden AB (controlled by the state
owned Irish Bank Resolution Corporation).”

The company with the debt claim rights, Elegant Invest, in September filed a court order with the government body that executes
court rulings to collect on the debt. Ukrainian
courts in 2011 recognized the debt claim as belonging to Lyndhurst Development
Trading in the British Virgin Islands, but which was later transferred to
Elegant Invest in Ukraine using Zenit, another Ukrainian company, as a conduit.

On March 13, a
Kyiv high court upheld Elegant Invest’s right to collect on the $45 million
debt claim against Ukraina shopping mall.

A Belfast
court, however, has ruled that Demesne Investments Ltd. in Northern Ireland is
the legal rights holder of the $45 million debt.

Demesne
was once run by former Irish billionaire Sean Quinn Sr. who went bankrupt. He
and his family once now owe some $3 billion in debts to Irish Bank Resolution Corporation, including $500 million worth of international properties,  of which the $78
million Ukraina shopping mall was a part.

When IBRC took over Quinn’s business empire, the Quinns
engaged in asset stripping to disrupt the bank’s debt recovery plan. As a
result, Irish courts have found Quinn Sr., his son, Sean Quinn Jr., and nephew, Peter Darragh Quinn, in contempt and handed them prison
sentences.

The
contempt of court convictions included stripping the Ukraina mall by keeping it
beyond the reach of the bank. In Ukraine, the Quinns were allegedly aided by
the shopping mall’s former management led by Laryssa Yanez Puga and associates,
including lawyers in Moscow.

A Ukrainian lawyer and an economist represented Lyndhurst had allegedly played a crucial role in stripping
the shopping mall’s assets.

Oleksandr Serpokrylov and
Dmytro Zaitsev were questioned via video-link by a Belfast court in November to
defend contempt of court proceedings over the $45 million debt transfer.

They allegedly ignored a
court injunction against any transfer of debts surrounding the mall.

In April 2011
Demesne transferred its rights to the debt to Innishmore Consultancy, another
Northern Ireland company run by Quinn Sr.’s nephew,
Peter Quinn. From there the loan was moved on to Lyndhurst in October 2011, the Irish Times reported.

On Feb. 25, the
Irish bank’s appointed director, Levinzon, finally gained
access to the mall’s management office to assume control over Ukraina’s
finances, including its estimated yearly $10
million rent roll after two years of legal battles with the former management. 

Possessing
21,000 square meters of leasable space with nearly 150 tenants, the fight for
control over the mall has been at times tense and dramatic.

Police armed
with Kalashnikov rifles once interrupted a children’s birthday party in the
mall’s bowling alley to prevent a confrontation between two security firms
hired by the mall’s former and current management.

Hidden camera
footage of shady million-dollar discussions taking place in Kyiv’s posh Fellini
restaurant have been leaked to the press. They involved Quinn Jr. and Peter
Quinn, and their erstwhile Ukrainian partners.

Unknown
minority shareholders in the mall have filed numerous court complaints
challenging the bank’s appointment of Levizon as mall director.

And on Feb. 7,
debts due to IBRC were transferred to a similar body in Ireland called the
National Assets Management Agency.

Kyiv Post editor Mark Rachkevych can be reached at [email protected].