In the spring of 2023, the Sova Capital Limited investment brokerage firm won a lawsuit against a major creditor. The company belongs to Roman Avdeev, a Russian billionaire and the founder of the Rossium Concern, who is also known as the owner of Moscow’s Torpedo Football Club and a shareholder of the Credit Bank of Moscow.
The lawsuit was heard at the High Court of Justice in London and focused on the assets of Sova Capital Limited. Several deals involving its assets were challenged by Boris Zilbermints, an entrepreneur and the company’s creditor, who is also known as the former deputy CEO of Gazprom Neft, a subsidiary of the Russian oil and gas giant Gazprom.
Due to international sanctions, Sova Capital Ltd. was placed under special administration in the spring of 2022, with a law firm called Teneo Financial Advisory acting as provisional administration.
Unable to realize Sova Capital assets, which included up to 90% of Russian securities, Teneo arranged to transfer a securities portfolio to one of the creditors in the fall of 2022. In turn, the creditor undertook to waive a claim totaling 233.2 million pounds. Teneo applied to the High Court for its approval to carry out the transaction; approval was also obtained from a relevant government commission in Russia.
However, Boris Zilbermints, who is also a Sova Capital creditor with a claim of about 20 million pounds, challenged the deal. He offered to purchase the portfolio for one-half of the agreed amount.
Eventually, the court ruled against him. The joint special administrators of Roman Avdeev’s Sova Capital Ltd. were granted permission to go ahead with the signed deal.
The court ruling is of interest to other foreign investment brokerage firms, as it sets a precedent of unsecured credit bids being possible even under sanctions if the deal is in the creditors’ best interests.
