Latvian bank awarded a temporary injunction against Russian debtor

Business daily Vedomosti ( reported that the Commercial Court of the Yamal-Nenetsk region ordered a preliminary injunction against a Russian company Severneft, based on a lawsuit filed by a Latvian bank Reverta after Severneft’s decision to liquidate. The Latvian bank is attempting to collect a loan of USD 75 million approved to another Russian company, Severorgsintez, for which Severneft acted as a guarantor. The latter company offered one of its oil and gas extraction licenses as collateral, but in 2011 it transferred the license to one of its daughter companies, which it subsequently sold to a Russian company Eurohim. While Severneft disputes the existence of such a guarantee, Eurohim already received the preliminary injunction order.

Eurohim believes that the court’s decision is based on misunderstanding and stated that it merely prevents the disposal of the aforementioned license, which is a measure that will not affect company’s operations in any way. Eurohim also has the right to annul the deal and claim USD 403 million paid for Severneft’s daughter company plus interest should it turn out that Severneft withheld essential information – such as third parties having rights over its daughter company’s assets.

At the same time, Severneft is confident that the sale of its daughter company to Eurohim was legal and is preparing its own suit, disputing Reverta’s right to file for temporary injunction as the bank was not formally registered as a creditor at the time. Reverta did file for its inclusion in the list of creditors on February 1, but Severneft disputed its filing and the inclusion is postponed until the court hears the case on March 25. A representative of Kinson International Corp., another large Severneft’s creditor with an exposure of USD 160 million, refused to comment on the case.

One of the Russian lawyers commented that the Russian bankruptcy law allows the deals concluded by a party undergoing bankruptcy to be disputed. Russian commercial courts tend to side with the plaintiffs in such instances. The central question of the dispute between Reverta and Severneft is whether the latter formalized its guarantee – it isn’t clear that the company’s manager at that time (Zhan Hudoinatov, coincidentially a brother of Rosneft’s Vice-President Eduard Hudoinatov) ever signed any such document. Should the existence and the validity of the guarantee be proven, Severneft’s creditors will be allowed to compensate their claims in accordance with their seniority. Reverta also filed a lawsuit against Hudoinatov, accusing Severneft’s former manager of fraud and deliberate bankruptcy.


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