Harju Country Court with its judgment decided not to commence bankruptcy proceedings against Arco Vara AS and dismissed Indrek Proila bankruptcy petition.
Arco Vara has considered from the beginning the bankruptcy petition by Indrek Porila as a malicious act aimed at discrediting the reputation of the company and deeming it as extortion. Indrek Porila has previously claimed pay out from Arco Vara in amount of 37943 000 kroons (2425 000 euros). Arco Vara has objected the unfounded claim and contested it. Despite the lack of proof about the claim and solvency of the company, Indrek Porile filed the bankruptcy petition.
The management board of Arco Vara AS stipulated in the 2007 in Initial Public Offering prospectus (IPO prospectus) that Indrek Porila has right for the bonus in amount of 12.5% from the equity capital of the Floriston Group, which is subject of payment after realization of Floriston Group’s real estate projects. In IPO prospectus the partial equity capital is valued in amount of 37943 000 (2425 000 euros). Since last autumn Indrek Porila didn’t wanted to obtain 12,5% equity of the Floriston Grupp OÜ as was agreed by oral agreement in 2001, instead demanded Arco Vara to pay a sum mentioned prior. Arco Vara has not acknowledged Indrek Porila´s such kind of claim contrary with the agreement, since non one of the real estate projects on the basis of which the equity considered to be divided, has been unrealized.
According to the Bankruptcy Act, the court shall not initiate proceedings if a claim is not clear and is being disputed. With its judgment the Court stroked the vagueness and contestability of the claim and that Arco Vara is not insolvent, therefore there will not existing any ground to start bankruptcy proceedings.
Founded in 1992 Arco Vara is one of the leading property developers in the Baltic States. The main business of the company is property development, which is supported by the group's own property brokering, valuation, construction and property management units. The company has representative offices in 17 towns across Estonia, Latvia, Ukraine and Bulgaria. The Group has a staff of ca 170.
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Arco Vara AS
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