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Arco Vara AS former employee Indrek Porila filed an action to the Harju County Court against Arco Vara AS (Arco Vara). In his application Indrek Porila demands Arco Vara to pay principal claim in amount of EEK 21.0 mio (EUR 1.3 mio) and compensatory interest in amount of EEK 6.3 mio (EUR 0.4 mio), all in total in amount of EEK 27.3 (EUR 1.7 mio). Additional on that Indrek Porila demands to transfer into his possession 12.5% of the shares of Floriston Grupp OÜ belonging to Arco Vara.

Indrek Porila filed earlier this year a bankruptcy petition against Arco Vara and demanded to pay EEK 37.9 mio (EUR 2.4 mio). Court dismissed Indrek Proila’s bankruptcy petition, finding the petition to be entirely unfounded.

The Management Board of Arco Vara AS stipulated on year 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 at 2007 the partial equity capital value at that time, calculated from the company´s goodwill was EEK 37.9 (EUR 2.4 mio). Since last autumn Indrek Porila didn’t wanted to obtain 12.5% equity of the Floriston Grupp OÜ which was agreed by oral agreement in year 2001, instead demanded Arco Vara to pay a sum mentioned in prior.

On his current actions Indrek Porila has come up with entirely new position and contrary to his previous demands, started to demand both: money and transfer of the 12.5% of the shares of Floriston Grupp OÜ. Arco Vara does not acknowledged Indrek Porila´s such kind of claim contrary with the agreement, because none of the real estate projects on the basis of which the equity considered to be divided, has been unrealized.

Since Arco Vara has filed on April 30th, 2010 an action against Indrek Porila to claim the damage, which Indrek Porila has caused to the company with his malicious bankruptcy petition. The Management Board of Arco Vara believes that Indrek Porila’s current action is counterattack to pressurize Arco Vara to withdraw its action and other legal remedies.

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 brokerage, valuation, construction and property management units. The company has representative offices in 17 towns across Estonia, Latvia, Ukraine and Bulgaria. The Group employees ca 160 people.

1 EUR=15.6466 EEK

Lembit Tampere
Member of the Management Board
Arco Vara AS
Tel: +372 614 4630
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http://www.arcorealestate.com/