Our firm defended one of the leading infrastructure companies in Lithuania from creditor’s claim. The claimant, Lithuania’s largest bank, sought confirmation of over quarter million EUR claim which had arisen as a fine in a factoring agreement. The client sought to finance the performance of their client’s duties to construct a certain amount of children’s playgrounds according to an independent work contract concluded with the Municipality of Vilnius.
The bank and the client had concluded a factoring agreement beforehand. The bank was obliged to transfer money to the client in exchange for the client’s monetary claim to the Municipality. The bank alleged that their client received and did not transfer back to the bank assigned assets paid to the client by the Municipality as was required in the contract and therefore was in breach of contract.
In the final judgment Vilnius district court upheld the client’s position that the facts pointed out by the bank could not be used as a foundation to recognize the bank’s claim, as the bank’s claim on the part of the not-transferred assets was already confirmed in the client’s restructuring case. The Court also agreed that the six-month prescription of the bank’s potential claim would have expired as the bank was aware of its performed transfers at the very same moment of its performance.
The outcome of the case was that the client avoided the confirmation of one of the biggest potential claims in the client’s restructuring case.