In this blog article, you can find the details (together with hyperlinks to court documents) of the legal process in Moldova, related to the recovery process against the borrower Kirsan Com S.R.L., the borrower of the Green Park Home residential development project.
|Cadastral nr. 0100105.050.01.066 – 185m2 ready premises located in Moldova, Chisinau, Trandafirilor 33/3 nr.of.66,
0100105.050.01.067 – 218m2 ready premises located in Moldova, Chisinau, Trandafirilor 33/3 nr.of.67,
0100105.050.01.068 – 303m2 ready premises located in Moldova, Chisinau, Trandafirilor 33/3 nr.of.68,
0100105.050.01.069 – 146m2 ready premises located in Moldova, Chisinau, Trandafirilor 33/3 nr.of.69,
0100108.019.01.164 – 419m2 ready premises located in Moldova, Chisinau, Burebista, 40/2,
01001119.451-01001119.453 – 3 land plots in Metropolis City,
0100101.865.05.104 – Fitness Forma (Gym) located in Moldova, Chisinau, Constantin Varnav str 20.
We requested Kirsan to provide several real estate properties as collateral to meet our term of 60% LTV for Green Park Home residential project financing on the platform. Altogether 9 different real estate properties (gym, offices, land plots) were included in the loan agreement and encumbered with a 1st rank mortgage to fulfill this term. Additionally to collateral properties owned by SRL Kirsan COM (0100105.050.01.066-0100105.050.01.069 and 0100108.019.01.164 – 1st rank mortgage), 3 additional guarantors are affiliated companies with Kirsan: SRL Fitness Forma ( 0100101.865.05.104 – 1st rank mortgage), SRL Valen Construct (01001119.451-01001119.453 – 1st rank mortgage) and SRL Econom House, who is the owner of the Green Park Home development project.
Kirsan Com SRL accelerated restructuring
Administrator: Selevestru Irina
Judge: Pădurari Valeriu
SRL “Kirsan COM” had its headquarters in the municipality of Chisinau, bld. Dacia 59. in the freshly built office where most of Kirsan companies were relocated. In March of 2023, the Kirsan COM S.R.L. changed its legal headquarters to Balti municipality, St. Nicolae 112 (address of a former school). This change seemed odd, as it was inexplicable why a company that is working on the development and construction of several projects in Chisinau needs to change headquarters to the municipality of Balti – 140km and 2 hours away from the center of its activity. Soon the portal of the courts and the Official Gazette of the Moldova Republic published the following Court Decision:
Bălți Court, Central headquarters no. 2i-13/2023 of May 15, 2023 – accelerated restructuring procedure of SRL “Kirsan COM”.
From this document, you can see, that on 9 March 2023 (the next day after the change of address) Kirsan COM SRL applied for the accelerated debt restructuring process in the local court of that small city. Debt restructuring is the process, where a company in financial difficulties comes into an agreement with lenders to renegotiate favorable or flexible terms to save themselves from bankruptcy.
At the end of June and beginning of July 2023, multiple hearings in court were held, where all the creditors had to present and prove their debt claims in the process to be approved by the Administrator.
We have submitted a request for recognition of the secured claim of Reinvest24 OÜ in the amount of 855,661.86 euros, equivalent to 16,608,396.70 lei. However, only the amount of MDL 15,671,604.80 was accepted into the table of claims, and the amount of MDL 936,791.90 was not accepted. On the day of the meeting (06/29/2023) we agreed to waive half of the penalty so that the bankruptcy administrator agreed to include in the table the amount of 15,671,604.80 lei and the amount of 456,394.40 lei, in total the amount of the confirmed claim will be 16,127,999.20 lei.
In this case, we also filed objections against all affiliated creditors of the debtor SRL Kirsan Com: Coman Mircea, Coman Serghei, SRL Kirsan Stroy, OCN People Credit SRL, SRL Assorti Grup, SRL Avanvo, SRL Capital Activ Group, SRL Econom House, SRL Kirsan, SRK Kirsan-Life, SRL KRS Project, SRL Locuința Confortabila, SRL Metropolis City, SRL Miraflores, SRL My Life Tech, SRL Nicotau, SRL Stroy Birja, SRL Kirsan Invest, SRL SVKD Project and SRL Trans Stroy.
The judge was scheduled to make a decision to confirm the claim on 06/30/2023. A meeting of creditors was also scheduled for the next day to vote on the accelerated restructuring plan. On the morning of June 30, 2023, an unconfirmed creditor of SRL Arte Ex Construct filed a motion to transfer the case to another court. The transfer request was rejected by the Balti Court of Appeal. This creditor filed an appeal, which was scheduled to be considered by the Supreme Court on November 29, 2023. The presented objections were considered, but the judge did not rule on them due to a motion to transfer the case. Usually, there are several grounds for disqualifying judges. For example, if he is a relative of one of the parties or has some interest in the process. The most common ground used by parties is that there are certain indications that the judge will not be impartial (at the moment we don’t have information on what basis the creditor SRL Arte Ex Construct filed a motion). The Supreme Court hearing is scheduled for February 14, 2024.
SRL Kirsan COM and SRL Valen Construct claim to remove mortgages
4 days before the SRL Kirsan COM accelerated restructuring process was started by the Bălți Court (May 15, 2023), on May 11, 2023 SRL Kirsan COM and SRL Valen Construct submitted a joint application to the Chisinau Court to remove the 1st rank mortgage from real estate properties with cadastral nr. 01001119.451-01001119.453, owned by guarantor SRL Valen Construct and real estate properties with cadastral nr. 0100105.050.01.066-0100105.050.01.067, owned by the borrower SRL Kirsan COM.
The basis of this claim was, that these non-residential real estate properties were provided as collateral (1st rank mortgage) for the loan issued to SRL Kirsan COM residential real estate development project Traian, and this loan was fully repaid. While it is correct that the loan issued for the previous project was fully repaid by SRL Kirsan COM, these real estate properties were used as collateral for their next real estate development project implemented by SRL Kirsan COM – Green Park Home residential development project.
The judge of the first instance rejected applications filed by SRL “Kirsan COM” and SRL “Valen Construct” regarding the security of the claim. Opponents appealed against the relevant decisions, which the Chisinau Court of Appeal has already rejected. The next court hearing for this matter is scheduled for March 12, 2024.
SRL Fitness Forma claim to remove mortgage
April 28, 2023 SRL Fitness Forma submitted a request to the Chisinau Court to remove the mortgage from the collateral property owned by them with cadastral nr. 0100101.865.05.104. The claim submitted to the court for removal of the mortgage was based on an argument that this property (gym) was collateral for SRL Kirsan COM previous development project Belgrad, and that the loan is fully repaid.
While it is true that SRL Kirsan COM made a full repayment of the loan issued for the development of Belgrad project, new agreements were conducted and signed to use this property as collateral for the Green Park Home residential development project implemented by SRL Kirsan COM.
The judge of the first instance rejected applications filed by SRL “Fitness Form” regarding the security of the claim. Opponents appealed against the relevant decisions, which the Chisinau Court of Appeal has already rejected. The next court hearing will take place on January 31, 2024. However, if we present new evidence, the plaintiff may require time to analyze it.
Comments from our lawyers in Moldova
Apparently, the creditor who filed the transfer request with a court of equal jurisdiction aims to delay the examination of the restructuring case of SRL Kirsan Com. Given that procedural legislation regulates various tools allowing a party to delay the case, it is possible that the file may not return to the Bălți Court soon. Unfortunately, this adversely affects all other creditors, as the activities of SRL Kirsan Com are halted, and any enforcement procedure against this debtor is suspended.
The disputes related to the withdrawal of bail filed by SRL “Fitness Forma”, SRL “Kirsan Com” and SRL “Valen Construct”, the plaintiffs have requested the court to take security measures in the form of a ban on any actions of Reinvest24 OÜ related to these properties. With these measures, opponents want Reinvest24 OÜ to be denied access to the exercise of collateral until the court decides on the merits of removing collateral from the Real Estate Register.
Reinvest24 assumes no responsibility or liability for any errors or omissions in the content of this article. The information contained in this article is provided on an “as is” basis with no guarantees of completeness, accuracy, usefulness or timeliness.