Corporate Conflicts

The project is related to a corporate conflict in a group of companies. Initially, when selling a share in a business, the Client had no opportunity to exercise his preemptive right to acquire a part of the business. The new buyer also attempted to dilute the Client's share. As a result, the Client lost corporate control in the parent company. The restoration of corporate control required filing of a claim for the protection of the shareholder's preemptive right and conducting of investigation. The PB Legal | Panin, Bayramkulov & Partners team won this case, proving that numerous transactions of various types (donation, assignment, etc.) were a single transaction for the sale and purchase of shares. Nevertheless, even having acquired the status of a majority participant (more than 60% of the shares), the client could not make key decisions in the company.

Therefore, we prepared the settlement agreement, according to which the Client was able to profitably obtain several premises in the center of Moscow, while retaining a share in the company. In addition, we have developed a backup strategy to protect the client in case of an opponent's breach of the settlement agreement. The strategy includes the incorporation of three companies (SPV), in which shares are divided in different proportions between the Client and the opponents, and the obligations of the opponents are secured by a number of options and sureties.

At the moment the project is in the final stage, most of the real estate is in the Client's ownership.

Before leaving the Bank a group of companies’ former top managers committed a number of managerial mistakes that caused significant damages to the Bank and its subsidiaries.

Due to a number of violations of former top managers the regulators charged the Bank with significant fines. As a result of the risks of accruing other fines, the Bank also was forced to form significant reserves. Thus, unreasonable and unfair actions of the former management caused the Bank to suffer losses both in the form of real damage and in the form of lost profits.

Moreover, former top managers by their ineffective management actions and abuses organized unprofitable business line related to the sale of equipment within the Bank's group of companies. Losses in this area amounted to several hundred million rubles.

Our team conducted a comprehensive corporate investigation to establish the fact of damage to the bank and its subsidiaries. Based on the analysis of a significant amount of documentation and a survey of companies’ group employees, we have developed a comprehensive strategy for recovering damages from former top managers of the Bank's group of companies. We offered the Client several ways to recover damages, including those caused by ineffective planning and spending of funds of the Client's group of companies, the accrual of public fines and capital reservation for the payment of such fines, ineffective use of a significant budget to promote the Bank's brand.

As part of the project, we interact with a number of expert institutions for an efficient and fair assessment of the losses caused to the Bank.

This project is of critical importance for the client, and its goal is to compensate for a significant amount of damages caused by the former management of the Bank.

As a result of investment and other actions of the client the manufacturer of medical devices has become the industry leader in six years. After that the majority shareholders began to persuade the client to sell his block of shares at par. The situation was complicated by the fact that in the course of a corporate conflict, opponents diluted the client's interest in the company by means of an additional issue of shares and illegal removal of the client from participation in the company. Subsequently, all assets of the company were withdrawn to the legal entities controlled by the opponents. The liquidation procedure was initiated against the company. Moreover, the shares owned by the opponents were formally alienated for non-market values in favor of the controlled legal entity.

Prior to working with our team, the client initiated more than 20 legal disputes, which, however, did not bring significant results.

As a result of our participation in the preparation of a legal position for the case on contesting the withdrawal of assets from the company, we managed to get the judgment in favor of our client. The asset, worth about 4 billion rubles, was returned to the company, where the client is a shareholder. Moreover, our team proposed a strategy for initiating a number of new litigations including the claim for the exclusion of majority shareholders, claim for challenging transaction for the alienation of shares to a controlled entity, as well as the claim for recovering damages from opponents for harm caused to the company by withdrawal of its main asset.

Our client, a majority group of beneficiaries of a pharmaceutical company with a turnover of about 10 billion rubles, has a conflict with the company's minority beneficiaries.

Opponents through a series of unfair actions seized corporate control of the company, which ownership is structured through the parent company in Cyprus. Our team developed a phased strategy to regain corporate control, as well as represent clients in Cyprus and Russian courts.

Thus, we helped clients to achieve full return of corporate control in the parent company in Cyprus. Moreover, our team provided support for the client in corporate procedures in Russia. By interacting with the client's counterparties, we also managed to prevent the division and withdrawal of business assets by the client's opponents.

Our team worked with witnesses and collected evidence to prepare procedural documents and legal position for the Cypriot litigation together with Cypriot lawyers.

Due to the actions of PB Legal | Panin, Bayramkulov & Partners team clients have a strong position in the negotiations on the peaceful settlement of the conflict on favorable terms.

During the conflict the client and his opponents initiated numerous criminal and arbitration proceedings in Russia and abroad.

The situation was complicated by the active opposition of the bank's management bodies, the actual impossibility of the majority of the bank's board of directors’ members acting in the interests of the client to exercise their powers, as well as the threat of the regulator to revoke the bank's license.

We have developed multi-stage strategies including effective proposals to minimize all potential risks, analysis of attracting the board of directors’ members to subsidiary liability, prepared all the necessary corporate documents for initiating and holding meetings of boards of directors and shareholders' meetings.

Our work included developing a strategy for litigation in Cyprus and coordinating the work of Cypriot lawyers, which allowed the client to exclude opponents from the board of directors of a Cyprus holding company. As a result, client obtained the control over the board of directors, corporate secretary and company's share register.

Moreover, our team prepared numerous testimonies in the form of affidavits from three client’s top managers and a memorandum of factual circumstances, which formed the basis of the legal position in the Cypriot court. There was a process of contesting interim measures obtained by the client's opponents in a Cypriot court unfoundedly.

Due to the strategy developed by our team and Cypriot lawyers, the client managed to avoid the prohibition of alienation and sale of shares of Cypriot companies pledged under a number of loan agreements, and to obtain full corporate control over the retail business together with partner banks.

Our team joined the project at the stage of cassation appeal in the Arbitration Court of the Volgo-Vyatskiy District, when the client had already lost the first two instances, and about 700 million rubles had been recovered from the company. We managed to turn the course of the process in favor of the clientin the cassation court. Our legal position was based on the current interpretation of the rules on the liability of the emitter and the registrar in terms of their unlawful and guilty actions. This allowed to release the emitter and the registrar from liability for lawful actions considering the circumstances of the case. The сassation court overturned the decisions of the lower courts and ruled in favor of our client.

According to the Kommersant newspaper this case was included in the top 10 most significant disputes of the year. It also has high importance for resolving similar disputes, since the court formulated clear criteria for distributing risks between shareholders and the emitter in case when shares are written off in the absence of the shareholder's will.

The founders of the company, a brother and sister, took a number of actions to diversify the holding structure, however, the defendant through a series of unfair actions deprived her brother of the company's shares, valued at approximately 15 billion rubles. The situation was complicated by a lot of contradictory documents. Moreover, considerable time has passed since the tort was committed, as a result our client was actually deprived of the opportunity to effectively defend his violated rights due to the criminal prosecution initiated against him. In addition, before our entry into the project, there were several decisions of Russian courts within this conflict, where the courts sided with the defendant.

We have developed a legal strategy in the framework of a multi-jurisdictional dispute and participated in key legal proceedings in the Austrian and Russian courts. During the project work, we also worked with witnesses, collected evidence, and coordinated the actions of English, Cypriot, and Austrian consultants.

The PB Legal | Panin, Bayramkulov & Partners team was a representative in a conflict within one of the Russian largest film industry companies.

Heirs of a deceased co-owner of a large business could not obtain payment of the actual value of their shares.

As a result of our work, the client managed to exercise the rights of the heirs' claims to businessmen successfully and on favorable terms.

PB Legal | Panin, Bayramkulov & Partners lawyers initiated legal disputes including disputes on the recovery of the actual value of shares in companies, as well as contesting of transactions outside of the bankruptcy case. The proceedings helped prevent withdrawal of assets from the business. Thus, our team prevented the inability of clients to receive funds; we also conducted a number of negotiations between the conflicting parties, as a result of which we managed to achieve repayment of the debt to the heirs on favorable terms.

Our client is a Russian state-owned company that invested capital in a mining company. The client entered into an option agreement with the company's second shareholder, under which he had the right to sell him his stake at a premium. Payment of the purchase price was guaranteed by the mining company itself.

Foreseeing the buyer's breach of obligations to pay for the stake, the client asked us to develop a debt collection strategy. Debt collection was complicated by the fact that the buyer was an offshore company. Along with the client there was an international bank claiming the assets of the buyer and the company, while filing claims against the company as guarantor could have provoked its bankruptcy.

We carefully studied all significant aspects of the client’s case: the option terms, the company's corporate and financial documents to model possible scenarios. Under each of the scenarios, we offered the client tools to fully satisfy its claims or minimise losses in the event of an unfavorable development of events.

Our client is a major mining company engaged in comprehensive field development and investment in them. The goal of the client was to acquire a stake in a company holding a license to develop a large field in the Republic of Bashkortostan.

The transaction to acquire the stake was complicated by the fact that the sole participant of the company was involved in court proceedings and corporate conflicts, including with the Deposit Insurance Agency. Also, a significant part of the property, which is necessary for the normal conduct of the company, belonged to its parent company. Therefore, there was a problem of structuring the transaction in a way to acquire both the company and the property necessary for its operation with the least risk.

The PB Legal | Panin, Bayramkulov & Partners team prepared for the client the strategy to mitigate any bankruptcy and corporate risks of the transaction. Based on vast experience in dealing with distressed assets, PB Legal | Panin, Bayramkulov & Partners lawyers developed a structure for the safest possible acquisition of a share in the company and the property necessary for its activities. The implementation of the said structure allowed the only participant of the company to repay its debts as well as resolve existing corporate conflicts. The solution proposed by PB Legal | Panin, Bayramkulov & Partners minimised significant risks associated with the project and secured the client's investment.

Our client is a major construction company that is a creditor in the bankruptcy case of a manufacturing company. In bankruptcy proceedings, the debtor's subsidiary filed claims for more than RUB 700 million.

An action for invalidity of transactions was brought by a minority shareholder of a subsidiary company on its behalf. The plaintiff claimed that the chain of commerce was a cover for another trade that had been made without the necessary corporate approval and was aimed at withdrawal of the company's assets. In court, the debtor agreed with the plaintiff's position, as a result of which the transactions were declared invalid.

The client, as a creditor of the debtor, appealed a judgment declaring the transactions invalid. As part of the case, we analyzed the corporate and commercial relationships between the debtor, its subsidiary, the plaintiff, and other members of their class. As a result of a detailed analysis, we developed a legal opinion that disclosed the nature of the transactions between the class members. The pattern we identified led us to conclude that the funds transferred under the contested transactions remained under the control of the debtor's subsidiary and that the transactions caused it no harm. We also revealed that the contested transactions were aimed at including a creditor "friendly" to the debtor in the bankruptcy case. In addition, we substantiated in detail that the plaintiff had missed the statute of limitations.

Our Clients are minority shareholders, investors in the industrial sector. Majority shareholders have not decided to pay dividends for a long period of time. Due to the prejudice of the Client's interests, a corporate conflict arose.

PB Legal has successfully initiated court proceedings to obtain the necessary documents from the JSC and to recover damages. Also, our team developed a strategy of actions, participated in negotiations, as well as in the annual general meeting of shareholders on behalf of minority shareholders.

By representing the Client's interests, PB Legal ensures the recovery of the legal regime of corporate control. To date, our lawyers have succeeded in winning a court ruling to seize the "1C" accounting database from the company.