On 24 December, with regard to case No.826/15961/16, the Supreme Court confirmed the lawfulness of the decision of the National Bank of Ukraine (hereinafter – the NBU) to resolve insolvent Bank Mykhailivskyi.
Thus, the court denied the cassation appeal of Ekosipan LLC and upheld the Resolution of Kyiv Administrative Court of Appeal dated 7 August 2017, which denied the claim filed by the bank’s shareholder.
Please be reminded that the NBU has revealed that Bank Mykhailivskyi performed transactions and executed (re-executed) agreements whereby its liabilities to individuals within the amount guaranteed by the Deposit Guarantee Fund (DGF) were increased by reducing the liabilities to a legal entity.
Considering the above, on 23 May 2016, the NBU Board approved Decision No. 14/БТ declaring Bank Mykhailivskyi insolvent.
In October 2016, Ekosipan LLC filed a lawsuit requesting that the NBU’s decision to resolve the bank be declared illegal and the operation of Bank Mykhailivskyi be resumed.
On 15 May 2017, the District Administrative Court of Ukraine satisfied the claim of Ekosipan LLC in part, in particular by cancelling the NBU’s decision to declare Bank Mykhailivskyi insolvent and liquidate it. However, the court refused to oblige the NBU to restore the bank’s activities.
By contrast, the court of appeal ruled to satisfy the NBU’s appeal and denied the claim of Ekosipan LLC in full. Said decision was upheld by the court of cassation.
For reference:
The NBU Board classified Bank Mikhailivskyi as insolvent on 23 May 2016. On 12 July 2016, on the DGF’s proposal, the NBU decided to revoke the bank’s license and liquidate the bank.
For more details on the reasons and results of the banking sector clean-up, please see Great Banking Clean-Up.