Eversheds Bitans has represented Latvian Joint Stock Company Latvijas Krajbanka before the court in proceedings against Ernst & Young Baltic — represented by Kronbergs & Cukste — on matters concerning audits of Latvijas Krajbanka financial statements conducted by EY. The matter was settled out of court.
Latvijas Krajbanka (in liquidation and represented by the insolvency procedure administrator KPMG Baltics SIA) filled a claim for damages against EyY in the Riga City Ziemelu District Court of Latvia alleging failings in relation to EY audits of the financial statements of LKB for the year ending 31 December 2010 and the half-year ending 30 June 2011. Ultimately, the dispute was resolved out of court. As part of the settlement, E&Y has agreed to pay EUR 7,75 million and the settlement was "concluded without any admissions of responsibility by either party and recognises the commercial benefits in bringing this matter to a close,” a release of Eversheds informed.
Agris Bitans, Eversheds Bitans Managing Partner, commented: "Any professional negligence claim is complex and challenging dispute, especially in case of auditor’s liability. Particularly in Latvia, due to lack of case law on auditor’s liability in the courts. For this matter — we gathered international case law and Eversheds international experience.
This settlement is good outcome in any case, since both parties recognised it as beneficial conclusion. For the insolvency procedure administrator KPMG Baltics SIA it is valuable step in recovery process.”
The Eversheds team was led by Bitans and included Attorneys Ilze Kramina and Edijs Poga.
The Kronbergs & Cukste team representing EY consisted of Partners Vineta Cukste and Valters Kronbergs, and Associates Madara Smalka and Normunds Orols.
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