Certain Controversial Issues Regarding Transfer of Rights and Obligations from Banks Undergoing Reorganization to Successor Banks

On 13 May 2013 the Higher Commercial Court of Ukraine (the HCCU) issued an Information Letter addressing certain controversial issues regarding transfer of rights and obligations from banks undergoing reorganization to successor banks.

The main issues highlighted in the letter are as follows. The HCCU pointed out that the courts should proceed on the basis that the bank incorporated as a successor upon merger or accession of banks acquires all the property, rights and obligations belonging to its predecessor as of the date of execution of the transfer act.

Therefore, the due and admissible evidence of legal succession as regards a particular obligation are respective agreement from which the obligation derives; the transfer act or demerger balance sheet and the charter of the successor bank. In this regard the courts examine the transfer act or demerger balance sheet for the purpose of identifying the entity that has acquired the rights and obligations as against identifying the indication of a particular obligation in the transfer act or demerger balance sheet.

The HCCU further points out that it is impractical in such cases to initiate expert examination for the purpose of assessment of the amount of property, rights and obligations transferred to the successor bank since the determination of the core and character of legal relations between the parties does not fall within the scope of the economic expect examination.

For further information please contact
senior associate Andriy Pozhidayev and associate Anna Kozhemiachenko.

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