Acting on behalf of a world-famous Japanese manufacturer and distributor of agricultural equipment Arzinger's team completed a long-term debt restructuring of more than USD 3,500,000 debts regarding two Ukrainian debtors.
Acting on behalf of a world-famous Japanese manufacturer and distributor of agricultural equipment, dispute resolution team of our South Ukrainian office consisting of Andriy Selyutin, Partner, and Anton Molchanov, Senior Associate, completed a long-term debt restructuring of more than USD 3,500,000 debts regarding two Ukrainian debtors.
The distressed debts arose from unpaid supplies of agricultural machinery and accessories to Ukraine and were greatly exacerbated by external factors (i.e. placement of letters of credit with an insolvent bank, economic crisis). Arzinger’s lawyers developed a restructuring plan based on overcoming the said external factors and a long-term analysis of the effects of partial debt setoff, possibility of third-party payments, and legality of payments from the view of Ukrainian currency legislation. Apart from that, specificity of supplied goods and the fact that post-sales service was retained by the debtor, had a significant impact on the restructuring concept.
The final restructuring will allow the debtors to repay their debts in reliance on Ukrainian economic realities, while the client gets gradual satisfaction of the principal and related monetary claims without applying compulsory collection in the long term. At the same time, the creditor and the debtor have retained mutual trust and intention to maintain their business relationship in the future, which is not typical for compulsory collection of distressed debts.
Arzinger sincerely thanks colleagues who represented the debtors’ interests in negotiations, for constructive dialogue and openness to the search for beneficial solutions. Without their active participation it would be hardly imaginable to ensure if successful outcome could be reached.