RosCo lawyers assisted in settling a dispute between manufacturing companies
RosCo's lawyers have developed a legal mechanism by which a foreign company was able to avoid bankruptcy.
RosCo’s client — a company incorporated in Russia (“Company 1”) — delayed payment to a manufacturing company, RosCo’s principal (“Company 2”). The debt amounted to USD 5.21 million.
At the same time, Company 2, also incorporated in Russia, faced a difficult financial situation and had two major debts to another counterparty registered in the UAE (“Company 3”). This debt totaled USD 5.26 million. In fact, the company was in a pre-bankruptcy state.
To prevent bankruptcy and help Company 2 preserve its assets, lawyers of the international law firm RosCo developed a legal mechanism for debt settlement. Thanks to the firm’s support, the dispute was successfully resolved out of court.
RosCo’s lawyers prepared a tripartite agreement. According to its provisions, the right of claim against Company 2 in the amount of USD 4.96 million was transferred from Company 3 to Company 1. Under the agreement, the obligations of Company 1 and Company 2 were terminated through set-off in the specified amount.
As a result, Company 1 incurred an obligation to Company 3 for USD 4.96 million. Due to the arrangements reached, mutual obligations between Company 1 and Company 2, as well as between Company 2 and Company 3, were partially settled through set-off.
The remaining debt of Company 2 to Company 3 was settled through a set-off of homogeneous claims. In developing the legal mechanism, RosCo’s lawyers took into account the tax specifics of Russia and the UAE to minimize risks arising from the tax regimes of both jurisdictions.
