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In this blog post you will find further details (and hyperlinks to court documents) regarding the legal process in Moldova relating to the recovery process against Kirsan Com SRL, a borrower in the Green Park Home housing development project.
Project Project Start Scheduled Period Collateral Green Park February 2022 7 months Cadastral Number 0100105.050.01.066 – 185m2 completed facility located at nr.of.66, Trandafilirol 33/3, Chisinau, Moldova,
0100105.050.01.067 – Completed facility of 218m2 located at Trandafilirol 33/3 nr.of.67, Chisinau, Moldova.
0100105.050.01.068 – Completed facility of 303m2 located at Trandafilirol 33/3 nr.of.68, Chisinau, Moldova.
0100105.050.01.069 – Completed facility of 146m2 located at Trandafilirol 33/3 nr.of.69, Chisinau, Moldova.
0100108.019.01.164 – Completed facility of 419 m2 located at 40/2, Brevista, Chisinau, Moldova.
01001119.451-01001119.453 – 3 land parcels in Metropolis City,
0100101.865.05.104 – Fitness Forma (Gym) at 20 Constantin Varnav Street, Chisinau, Republic of Moldova.
We asked Kirsan to pledge multiple properties as collateral to meet the 60% LTV requirement of the Green Park Home residential project loan on our platform. A total of 9 different properties (gym, office, land parcel) were included in the loan agreement and a first lien was created to meet this requirement. In addition to the secured properties owned by SRL Kirsan COM (0100105.050.01.066-0100105.050.01.069 and 0100108.019.01.164 – first lien mortgages), there are three additional guarantors: Kirsan’s affiliates SRL Fitness Forma (0100101.865.05.104 – first lien mortgage), SRL Valen Construct (01001119.451-01001119.453 – first lien mortgages) and SRL Econom House, the owner of the Green Park Home development project.
Administrator: Celebestre Irina
Judge: Padulari Valeriu
SRL “Kirsan COM” had its headquarters at Dacia 59 in the city of Chisinau, in newly built offices where most of the Kirsan companies were relocated. In March 2023, Kirsan COM SRL changed its legal headquarters to St. Nicolae 112, Balti city (the address of the former school). This change seemed strange, since it was inexplicable that a company working on the development and construction of several projects in Chisinau should change its headquarters to the city of Balti, which is 140 km and 2 hours away from the center of activity. Soon the following court decision was published on the court portal and in the Official Gazette of the Republic of Moldova:
Order of the Central Chamber of the Court of Bălți dated 15 May 2023 No. 2i-13/2023 – Accelerated restructuring proceedings of SRL “Kirsan COM”.
From the document, we can see that on March 9, 2023 (the day after the change of address), Kirsan COM SRL applied for an accelerated debt restructuring process at the local court in that small city. Debt restructuring is a process in which a financially distressed company agrees with its lenders to renegotiate more favorable or flexible terms to avoid bankruptcy.
There were multiple hearings in court in late June and early July 2023, during which all creditors were required to present and prove their debt claims for approval by the Trustee.
We submitted an application for approval of Reinvest24 OÜ's secured claim of 855,661.86 euros (equivalent to 16,608,396.70 lei). However, only MDL 15,671,604.80 was approved in the claims table, and MDL 936,791.90 was not approved. On the day of the meeting (June 29, 2023), we agreed to waive half of the fine, so the insolvency trustee agreed to include 15,671,604.80 lei and 456,394.40 lei in the table. In total, the confirmed claims amount to 16,127,999.20 lei.
The matter also included objections against all relevant creditors of the debtor SRL Kirsan Com (Coman Mircea, Coman Serghei, SRL Kirsan Stroy, OCN People Credit SRL, SRL Assorti Grup, SRL Avanvo, SRL Capital Activ Group, SRL Econom House, SRL Kirsan, SRK Kirsan-Life, SRL KRS Project, SRL Locuința Confortabila, SRL Metropolis City, SRL Miraflores, SRL My Life Tech, SRL Nicotau, SRL Stroy Birja, SRL Kirsan Invest, SRL SVKD Project and SRL Trans Stroy).
The judge was scheduled to make a decision to confirm the claims on June 30, 2023. A creditors' meeting to vote on the Accelerated Restructuring Plan was also scheduled for the following day. On the morning of June 30, 2023, an unidentified creditor of SRL Arte Ex Construct filed a motion to transfer the case to another court. The transfer request was rejected by the Bharti Court of Appeal. This creditor filed an appeal and was scheduled to be heard in the Supreme Court on November 29, 2023. The objections filed were considered, but due to the motion to transfer the case, the judge did not rule on them. There are usually several grounds for disqualifying a judge, for example, if the judge is a relative of one of the parties or if he has some interest in the process. The most common ground asserted by the parties is that there are indications that the judge is not impartial (at this time there is no information on what grounds the creditor SRL Arte Ex Construct filed the motion). The hearing in the Supreme Court is scheduled for February 14, 2024.
Four days before the accelerated reconstruction process of SRL Kirsan COM was initiated by the Baluchi Court (15 May 2023), on 11 May 2023, SRL Kirsan COM and SRL Valen Construct filed a joint application in the Chisinau Court to release the first lien from the real estate with cadastral numbers 01001119.451-01001119.453 owned by the guarantor SRL Valen Construct and the real estate with cadastral numbers 0100105.050.01.066-0100105.050.01.067 owned by the borrower SRL Kirsan COM.
The basis of this claim was that these non-residential properties were provided as security (first lien mortgage) for a loan issued to SRL Kirsan COM's residential property development project, Traian, which loan was repaid in full. While it is true that the loan issued to the previous project was repaid in full by SRL Kirsan COM, these properties were used as security for the next real estate development project undertaken by SRL Kirsan COM, the Green Park Home residential development project.
The judge of first instance rejected the application submitted by SRL KirsanCOM and SRL Valenkonstruct regarding the security of the claims. The opponents appealed the relevant decision, but it has already been rejected by the Chisinau Court of Appeal. The next court hearing on the matter is scheduled for March 12, 2024.
SRL Fitnessforma requests release of mortgage
On 28 April 2023, SRL Fitness Forma requested the Chisinau Court to release the mortgage from the secured property it owns (cadastral number 0100101.865.05.104). The claim submitted to the Court for the release of the mortgage is based on the allegation that the property (gym) is collateral for SRL Kirsan COM’s previous development project in Belgrade and that the loan has been repaid in full.
While it is true that SRL Kirsan COM has fully repaid the loan issued for the development of the Belgrade project, a new agreement has been signed to use the property as collateral for the Green Park Home housing development project implemented by SRL Kirsan COM.
The judge of first instance rejected the application filed by SRL “Fitness Form” regarding the security of the claim. The opponent appealed against the related decision already rejected by the Chisinau Court of Appeal. The next court hearing will take place on 31 January 2024. However, if new evidence is presented, the plaintiff may need more time to analyze it.
Apparently, the creditors who filed the transfer request in the court of equal jurisdiction are seeking to delay the examination of SRL Kirsan Com's restructuring case. The Procedural Law regulates the various means by which parties can delay a case, so it is possible that the case will not return to the Bălți Court any time soon. Unfortunately, this will have a negative impact on all other creditors, SRL Kirsan Com's activities will be suspended and all enforcement proceedings against this debtor will be stayed.
In the disputes relating to the withdrawal of bail brought by SRL “Fitness Forma”, SRL “Kirsan Com” and SRL “Valen Construct”, the plaintiffs have asked the court to provide safeguards in the form of a prohibition on any actions by Reinvest24 OÜ in relation to these properties. With these measures, the opponents want to prohibit Reinvest24 OÜ from enforcing their security interests until the court decides whether or not to remove the security from the real estate register.
Reinvest24 assumes no responsibility or liability for any errors or omissions in the content of this article. The information contained in this article is provided “as is” with no guarantee of completeness, accuracy, usefulness or timeliness.