Банкеръ Weekly



The lawsuit for the insolevncy of the Razgrad-based glass manufacturer Diamant AD will be heard by the Supreme Cassation Court on March 11, the company's lawyer Vesselin Zapryanov told the BANKER weekly. Even if the magistrates extend a ruling in favour of the enterprise, there is no chance that it resumes operation, the lawyer admitted. The equipment has been idle since August 2001 after Bulgargas stopped gas supply. The company was declared insolvent on September 5, 2003. It is one of the biggest debtors to the state-run Bulgargas, owing it more than BGN11MN. In addition to Bulgargas, a number of smaller creditors demanded their receivables. Among them are 8 juristic and 74 natural persons, mainly workers of Diamant. The State Receivables Agency on its part claims BGN600,000, half of which is still contested by the trustees in bankruptcy. Although the cashing of the enterprise's assets was ruled when the decision for its insolvency was made, the trustees in bankruptcy Boyan Minev and Gorcho Todorov have not sold anything yet. We will first invite a tender to nominate evaluators of the property and only afterwards will proceed with the sale Mr. Minev said. According to the company's balance sheet, its assets include plots of land worth BGN374,000, buildings worth BGN3.8MN, machines and equipment estimated at almsot BGN13MN.Insolvency procedures against the glass-maker were launched on January 18, 2002 and the court ruled in favour of Bulgargas' claims. However, Diamant shareholders litigated that decision in front of the Varna Court of Appeal, which overruled it in July 2003. But Bulgargas referred the case to the supreme magistrates who returned the lawsuit to the Razgrad Regional Court. The latter confirmed its previous decision and ruled to start selling the assets. Again, Diamant litigated the court's ruling. Under the amendments to the Commercial Act, passed in June 2003, the litigation of insolvency lawsuits can go through two instances only. Thus, the case was again transferred to the Supreme Cassation Court. On September 26, 2002, the Finance Ministry sent a letter to the Razgrad Regional Court saying it did not agree to draft a rehabilitation plan for the enterprise. Its stance is necessary when a company in insolvency procedures has liabilities to the State Receivables Agency. But the moment when the Finance Ministry expressed its stance was not very suitable. For a short period of time then Diamant was temporarily not in a state of insolvency (due to the ruling of the Court of Appeal). That is the major motive of the glass manufacturer's owners for litigating its bankruptcy. According to Mr. Zapryanov, their right to propose a rehabilitation plan has been violated due to the above-mentioned letter. Diamant EAD was divested through mass privatisation in the begining of 1997. 67% of its capital were then divided between three holding companies (then privatisation funds) - Bulgarian Holding Company, Orel Invest Holding and TK-Hold. On December 30, 1997 the MEBO Diamant Prima purchased 26.4% of Diamant's capital against BGL632.5MN (prior the BG lev's denomination). The payment of 90% of the price was rescheduled for 5 years, and the only condition set to the buyer was to pay 70% of it in long-term government bonds. According to representatives of the Agency for Post-privatisation Control, the price was paid back in 2001, BGL315MN of which in compensation instruments.

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