TALLINN – TGS Baltic, the law firm representing Marcel Vichmann's company OU Best Idea, announced on Tuesday that an Irish court on Monday annulled an order declaring the bankruptcy of Estonian businessman Oliver Kruuda in Ireland on June 28 last year.
The decision was based primarily on the fact that Oliver Kruuda failed to notify the Irish court that he had been the subject of a bankruptcy petition by Best Idea and an interim trustee had been assigned to him before the declaration of bankruptcy in Ireland, TGS Baltic said.
According to the law firm, this is a case setting a precedent in both Estonian and international case law. The Irish court annulled Kruuda's bankruptcy order in Ireland, despite the fact that his bankruptcy was declared in Ireland before he had been declared bankrupt in Estonia.
The decisive factor, according to TGS Baltic, was the fact that an interim trustee had already been appointed for Kruuda in Estonia prior to the declaration of bankruptcy in Ireland, which means that insolvency proceedings within the meaning of the EU Cross-Border Insolvency Regulation had started earlier in Estonia.
According to TGS Baltic, Kruuda went into hiding in Ireland in order to avoid bankruptcy in Estonia and to achieve a faster and easier release from liabilities through bankruptcy in Ireland. Kruuda was declared bankrupt in Ireland on June 28 last year, but Best Idea challenged the Irish court's order in Ireland, which led to the Irish court overturning its order.
What makes the situation unique, according to the law firm, is that the proceedings were conducted simultaneously in Estonia and Ireland, and first the courts in Estonia found that the bankruptcy order previously made in Ireland did not prevent bankruptcy proceedings regarding Oliver Kruuda from being conducted in Estonia, and then the Irish court found that the bankruptcy order made in Ireland had to be revoked because of the proceedings that had been opened in Estonia.
Kruuda still has time to challenge the Irish court's decision.
The Tartu County Court declared Kruuda as bankrupt in October 2021. Best Idea OU, a company owned by Estonian businessman Marcel Vichmann, filed for Kruuda's bankruptcy in May of that year due to Kruuda's failure to pay a 15-million-euro debt pursuant to a court's decision.
According to the court's decision, Kruuda personally and on behalf of AS Rubla undertook by written agreement to pay all debts to Vichmann's businesses.
AS Rubla, formerly named Tallinna Piimatoostuse AS and Tere AS, was under liquidation from 2015 and has been declared bankrupt by now.
According to the text of the action by Vichmann's company, Kruuda had hid himself and transferred all his assets in order to avoid fulfilling his obligations.
In January this year, the Tartu Circuit Court dismissed Kruuda's appeal against the bankruptcy order regarding him because it found that Kruuda's center of main interests was in Estonia, despite his stay in Ireland.
Kruuda argued that an Irish court declared him bankrupt on June 28 last year, so the county court did not have jurisdiction to open main insolvency proceedings and the appointment of an interim trustee on June 7 last year could not be considered as initiation of insolvency proceedings under the EU regulation.
The Supreme Court of Estonia dismissed Kruuda's appeal in the case in April this year, making the bankruptcy decision made by the circuit court final.