Supreme Court Grand Chamber Declares Illegal Schemes Of Withdrawal Of Liquid Assets From Ukrainian Professional Bank Via Companies Associated With Yurkevych

On January 11, 2022, the Grand Chamber of the Supreme Court of Ukraine considered a test case upon illegal withdrawal of assets of currently-bankrupt Ukrainian Professional Bank in 2015.

In compliance with operative part of the judgment, the Court satisfied appeals from the Deposit Guarantee Fund (DGF) and Investhills Vesta Financial Company (which filed a cassation appeal).

As earlier reported, case 910/10784/16 has been considered since 2016 under an appeal from Ukrainian Professional Bank represented by the Aurum Finance Financial Company LLC and the Hurman 2014 LLC. The DGF demands that the Aurum Finance Financial Company LLC return to Ukrainian Professional Bank the legal claim for collaterized property of the Stryi furniture combine. In compliance with the case materials, as of May 2015, the Stryi combine accumulated a debt of around USD 6 million in a loan drawn from Ukrainian Professional Bank. In order to obtain the said loan, the combine mortgaged property (real estate, etc.) worth UAH 153.8 million (under DGF data available as of May 2015).

The DGF declared all the aforementioned loan agreements with the Stryi furniture combine void, as the Aurum Finance had not provided the bank with the real funds, transactions had been artificial, and had not been carried out via a correspondent account of the National Bank of Ukraine, the property had been withdrawn from the bank at a knockdown price, and the fact that the Aurum Finance itself can be associated with Ukrainian Professional Bank.

The Grand Chamber of the Supreme Court has abolished judgments of courts of previous instances. The Court declared the agreements on withdrawal of assets (liquid real estate) from Ukrainian Professional Bank to be void and returned the legal claim for the Stryi combine’s real estate to the bank. It also obliged the Hurman 2014 LLC to return to Ukrainian Professional Bank originals of all credit and mortgage agreements, rights to which were transferred to the Aurum Finance under void agreements in May 2015.