Asset Recovery. Case Study

By Dmytro Marchukov, Partner

Kyiv, 30 June 2016

Preface

Ukrainium is a rare metal found in Ukraine only. Thanks to its unique features, it will be used in production of the Marea subsea cable, which Microsoft and Facebook are going to lay across the Atlantic Ocean.

Ukrainium Production Plant LLC (UPP LLC) is jointly owned by Sunny Ltd (85%) and Shiny Ltd (15%). Its ultimate beneficial owner is Mr. Omovich.

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Case Study Legend 1Lord Naiv (Lender) and D-folt Ltd (Initial Borrower) enter into the Loan Agreement, secured by:

(i) pledge of the participatory interest of Sunny Ltd in UPP LLC;

(ii) mortgage of the Ukrainium Production Plant by UPP LLC; and

(iii) personal guarantee granted by Mr. Omovich (UBO).

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Case Study Legend 2

Having received the funds under the Loan Agreement, D-folt Ltd lends these funds toD-frod Ltd. In its turn,D-frod Ltd lends them to UPP LLC.

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Ms. Omovich launches divorce proceedings before the Ukrainian courts.

Case Study Legend 3

D-folt Ltd defaults under the Loan Agreement. Lord Naiv issues:(i) acceleration notice to the D-folt Ltd under the Loan

Agreement; (ii) demand to Mr. Omovich under the Personal

Guarantee; (iii) enforcement notice to UPP LLC under the Mortgage

Agreement; and (iv) enforcement notice to Sunny Ltd under the Pledge

Agreement.

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Case Study Legend 4

Lord Naiv initiates proceedings before the High Court in London against Mr. Omovich and obtains freezing order against him.

As a result of Ukrainian divorce proceedings Mr. Omovich transfers all of his meaningful assets to Ms. Omovich.

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How can Lord Naiv get his assets back?

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THANK YOU!

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