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The Commercial Court of Kyiv City has endorsed the pre-trial restructuring plan for the household appliance retailer Legal representation for the retailer is provided by Ario Law Firm

News, Projects

Restructuring and Insolvency

25 April 2024

The Commercial Court of Kyiv City has greenlit's restructuring plan prior to the initiation of bankruptcy proceedings under Article 5 of the Bankruptcy Code. This move will enable the household appliance network to sidestep the potentially crippling court bankruptcy procedure, a practice that's virtually fatal for any business. Despite opposition from some creditors, the overwhelming majority—nearly 70%—have endorsed the pre-trial restructuring plan. Representing in the solvency restoration case are partners from Ario Law Firm, Julian Khorunzhiy and Andrii Fylyk.

It's important to mention that the ommercial Court of Kyiv City had previously rejected the pre-trial restructuring plan, as insisted upon by a minority of creditors.

"The terms of our pre-trial restructuring plan for creditors remained virtually unchanged. However, we took note of the court's feedback during the review of the initial plan. As a result, we fine-tuned our proposals, addressing technical inaccuracies, and ultimately secured, in my view, a fair decision. According to our information, is poised to begin debt repayment to creditors as early as May," shared Andrii Fylyk, a partner at Ario Law Firm.

According to the pre-trial restructuring plan:

  • is committed to repaying 30% of the debt amount over a five-year period.
  • 30% of the debt will be written off.
  • An additional 40% will be distributed to creditors after compensation for damages caused by the aggressor country, Russia.

"Here it's important to note that as of today, there's already a court decision to recover over $3.5 million from Russia in favor of," said Julian Khorunzhiy, Senior Partner at Ario Law Firm. "By our rough estimates, our client has suffered losses exceeding 1.1 billion hryvnias due to Russian aggression, including missile strikes on warehouses and the occupation of parts of Ukrainian territory."

He also emphasized that the approval of the pre-trial restructuring plan offers tangible opportunities for creditors to receive funds. In contrast, during restructuring under bankruptcy proceedings or the liquidation of the enterprise (as demanded by opponents of pre-trial restructuring), the chances of receiving even a portion of funds are minimized and stretched out over many years.

Let's remind ourselves that due to the war aggression from the Russian Federation, the network has suffered substantial losses: inventory was destroyed at the central warehouse and in some stores, while certain retail outlets remain situated in temporarily occupied territories. In total, around 20 network facilities were affected, with some being placed under conservation due to their proximity to active combat zones. To seek compensation for the incurred losses, has filed lawsuits against the aggressor country, the Russian Federation.