Last year we informed everyone that we had plans to aggressively pursue claims against the Loan Originators in default. We had prepared most of the necessary paperwork to start legal enforcement of the loans and to return the money to investors.
We had to put our plans on hold because of the insolvency applications made by several investors. Although the possibility of the companies concerned to be declared insolvent was small, for legal reasons we could not proceed with filing claims against the Loan Originators.
We also understood that if the investors’ attempts to have the companies declared insolvent had failed, other forms of legal attacks on the companies would still be imminent. In case of such attacks both sides would invest their resources in mutual disputes and the only parties to benefit from these disputes would be the Loan Originators who could successfully argue that these disputes preclude them from repaying money to anyone.
Therefore, we approached the investors’ Latvian lawyers with an offer to go against the Loan Originators together.
Although we are still in the process of negotiating a formal ceasefire with the investors’ Latvian lawyers (Ellex), the talks we have had so far have given us confidence that a solution acceptable to all parties is possible. We are indeed grateful to the investors and their Latvian lawyers for agreeing to start a dialogue and we intend to make the most out of this unique opportunity.
As we all know, the list of issues to be addressed is not a short one. Our ability to address all these issues at once is restricted by our limited capacity (mostly, in terms of personnel and funding). Although it is our intention to meet all investors’ demands, at this point we are moving forward based on the priority of outstanding matters. The matter of the utmost urgency, as everybody will agree, is to return as much money as possible to the investors.
Therefore, at this time we are primarily focusing on lodging legal claims against the Loan Originators in default. There is a lot of paperwork involved and we need to anticipate every move and argument from the defendants’ side in advance. It requires a lot of work. However, we are succeeding and have now filed the first claims with the arbitration court. The debt collection process has officially started.
We will provide full information on the progress of legal proceedings to the investors’ lawyers and will appreciate their input. If money is recovered, we will negotiate with the investors’ lawyers an acceptable and secure process of delivering the recovered funds to the investors. We hope this will help to gradually build mutual trust.
In addition, we are in the process of negotiating out-of-court settlements with those Loan Originators who are cooperative. As we have informed before, the main concern of these Loan Originators is the position of investors and possible adverse consequences if the investors object to repayment of funds to us. With the help of Ellex we will be finally able to address these concerns and agree on repayment methods acceptable to all parties involved.
We will report on our progress on all above matters.