The Northern Appeal Commercial Court has confirmed the pre-litigation reorganization plan for ELDORADO.UA in the retailer’s insolvency recovery case. The case is being managed by the team at Ario Law Firm

The Court of Appeal has rejected the appeals filed by some creditors of the Eldorado.ua household appliance network and upheld the Kyiv Commercial Court's ruling to approve the reorganization plan before the commencement of bankruptcy proceedings under Article 5 of the THE Code of Ukraine on Bankruptcy Procedures .

It is important to note that Eldorado.ua has been meeting its obligations under the pre-litigation reorganization plan, which was approved in April of this year. Over the past three months, the company has repaid approximately 5% of the total amount specified in the plan.

The household appliance network is represented by Ario Law Firm partners Julian Khorunzhiy and Andrii Fylyk.

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As a result of the military aggression by the Russian Federation, the Eldorado.ua network has suffered significant losses, with inventory destroyed at the central warehouse and several stores, and some retail outlets remaining in temporarily occupied territories. In total, around 20 network facilities were affected, some of which have been mothballed due to their proximity to active combat zones. Despite these severe losses, the retailer intends to continue operations and remains a major taxpayer.

Despite opposition from some creditors, the vast majority—almost 70%—have agreed to the pre-litigation reorganization plan developed by Eldorado.ua and the Ario Law Firm.

According to the plan:

• Eldorado.ua will guarantee repayment of 30% of the debt over five years.
• 30% of the debt will be written off.
• The remaining 40% will be paid to creditors after compensation for the losses caused by the aggressor state, the Russian Federation, is received.

"After the court of first instance approved the pre-litigation reorganisation plan, we immediately started to meet our obligations in May. Within three months, we had repaid approximately 5% of the approved amount and are fully in compliance with the payment schedule set out in the plan. Despite opposition from some creditors who disagree with our plan, we are confident that we will continue to meet our obligations on time in the fourth and subsequent months," said Maksym Baydyk, Director of the Legal Department of DIESA LLC (TM Eldorado). "The well-drafted pre-litigation reorganisation plan, developed in cooperation with the Ario law firm and approved by both courts, allowed our company to stay afloat and start the recovery process. Unfortunately, some creditors (albeit significantly fewer) still fail to recognise that a functioning business has a better chance of repaying its debts than an insolvent one, and are attempting to initiate bankruptcy proceedings against Eldorado.ua"

Andrii Fylyk, a partner at Ario Law Firm, noted that another round of court proceedings is expected at the Supreme Court.

“I am confident that creditors who disagree with Eldorado.ua’s pre-litigation reorganisation plan will file a cassation appeal with the Supreme Court. On our part, we have strong arguments to support that the decisions of both the first-instance and appellate courts were fair. By choosing the most complex recovery procedure — pre-litigation reorganisation — our client is demonstrating a strong commitment to fulfilling its obligations,” said Andrii Fylyk.

Julian Khorunzhiy, senior partner at Ario Law Firm, added that Eldorado.ua has filed multiple lawsuits against the Russian Federation in order to recover damages and settle with creditors, and has already achieved victories in court.

“The client has already obtained two court rulings, securing approximately $3.6 million and $15.95 million in compensation from Russia. In total, Eldorado.ua has incurred losses exceeding 1.1 billion UAH due to the Russian invasion,” said Julian Khorunzhiy.