Friday, September 17, 2010

Secured Transactions – Ukrainian Style

Based on a complaint made by the Ukrainian bank “Ukrsotsbank”, criminal charges were brought in connection with an allegedly unlawful sale of the "Podolsky" department store building. The building, sold without notice to Ukrsotsbank, apparently served as collateral for the bank’s $70 M loan to a popular Ukrainian restaurant chain, “Puzata Hata".  The Puzata Hata chain is currently in bankruptcy, and allegedly it has been transferring its assets to another entity, without notifying Ukrsotsbank, in an effort to avoid repayment of its debt.  While some question the ultimate success of the criminal charges - the department store was the guarantor and not the debtor – Ukrsotsbank's lawyers are optimistic about winning the building for the bank.

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