“Rusmetali LTD”

Corporate dispute / unlawful disposal of assets in the metallurgical sector – Z. M. against LLC “Rusmetali”, LLC “Ruseloysi”, LLC “Rustavi Group”, and related natural persons.

Case description:

The case concerns the transfer of company assets carried out at a time when LLC “Rusmetali” already had significant financial obligations imposed by a court in favour of the claimant.

According to the claimant’s position, this action constituted a pre-planned scheme aimed at concealing assets and avoiding the fulfilment of obligations.

 

Factual circumstances:

By a decision of the Tbilisi City Court (2015), LLC “Rusmetali” was ordered to pay 700,000 USD. Subsequently:

  • The company’s main assets were fully transferred to a newly established company – LLC “Ruseloysi”;
  • The transfer of assets was carried out without notifying the claimant.
  • A new company was established through an offshore structure.
  • There is a close nexus and unified control between the companies.

 

Core legal issues.

  • The legality of the disposal of assets;
  • The validity of decisions made by bypassing the general meeting of partners;
  • Compliance of transactions between related parties with the arm’s length principle;
  • The infringement of creditor rights and the intentional concealment of assets.

 

Evidence and Analysis

The evidence presented in the case indicates that:

  • Assets were disposed of, presumably at undervalue;
  • The companies and individuals involved in the transaction are related parties;
  • Audit reports confirm financial and accounting irregularities;
  • The company’s governing bodies exceeded their authority.

 

Legal Position

The claimant maintains that the Supervisory Board’s decision, which served as the basis for the asset transfer, contravenes current legislation and must be declared void.

 

Outcome / Claim

The following claims are brought before the court:

  • For the annulment of the decision of the Supervisory Board of Rusmetal LLC;
  • For the reversal of the legal consequences of the asset transfer.

 

Significance

The case constitutes one of the most significant precedents in Georgian corporate law concerning:

  • The liability of dominant partners;
  • Creditor protection standards;
  • The legal assessment of the concealment of assets by companies.

Outcome

The case is currently the subject of active litigation, and proceedings are ongoing in the relevant court of instance.

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