TGS Baltic has successfully represented Orlen Lietuva, Philip Morris Lietuva, and Lietuvos Pastas in a dispute regarding the lawfulness of an out-of-court bankruptcy process for Inter Rao Lietuva.
Orlen Lietuva is a subsidiary of the Polish PKN Orlen and it owns the Mazeikiai oil refinery as well as an oil-processing plant in Lithuania. It is the only oil refinery in the Baltic States. Philip Morris Lietuva is Philip Morris International's affiliate in Lithuania. Lietuvos Pastas is the Lithuanian postal service. Inter Rao Lietuva is involved in the wholesale and retail trade of electricity in Lithuania.
According to TGS Baltic, “the Court of Appeal of Lithuania held that the bankruptcy process of Inter Rao Lietuva had been started unlawfully” without informing Orlen Lietuva, Philip Morris Lietuva, and Lietuvos Pastas as interested parties. According to the firm, failure to properly inform the companies “deprived them of a possibility to object to the application of the out-of-court bankruptcy procedure, appointment of the insolvency administrator, eliminated the possibility to present their arguments and evidence regarding the insolvency of the company, a possibility to initiate a judicial dispute that would actually prevent the start of such a bankruptcy procedure.”
As TGS Baltic explains, “the court noted that the essence of bankruptcy carried out in an out-of-court manner is an amicable process where the company and all its creditors reach a common agreement. Therefore, a company seeking bankruptcy must treat each person who potentially can make claims against it for the fulfillment of the company’s obligations, irrespective of the amount of the financial claims, as its creditor and must inform all creditors about its intention to start a bankruptcy process: both those the claims of which it accepts and those that it does not.”
Ultimately, the decision to start the process of out-of-court bankruptcy of Inter Rao Lietuva was canceled.
The TGS Baltic team included Attorneys at Law Dovile Armalyte, Ramunas Kontrauskas, and Marius Brasiunas and Associate Attorney at Law Lukas Radzevicius.
