Ukrlandfarming, Gramercy Funds reach settlement
All lawsuits by Gramercy Funds Management LLC against Ukrlandfarming (ULF) owner Oleh Bakhmatiuk have been fully dismissed, with both the U.S. and Cyprus courts halting all legal proceedings. The parties have reached a confidential settlement agreement, according to a statement by Ukrlandfarming on its website.
The creditors who initiated the litigation have agreed to withdraw their claims without the option to refile after a settlement was reached. Among the defendants were U.S. investor Nicholas Piazza, Oleksandr Yaremenko, SP Capital Management LLC, TNA Corporate Solutions LLC, and Maltofex LLC, the company said.
Bakhmatiuk views the settlement as a positive development, not only because the case cannot be reopened, but also because it may help his business, which has lost around half of its value due to Russia's invasion of Ukraine. He hopes that this agreement will set a precedent for future negotiations with creditors.
"I truly consider this a victory. It is highly beneficial for all parties," Bakhmatiuk said in the statement.
Gramercy Funds Management LLC had initially filed a lawsuit in a U.S. federal court on December 7, 2022, accusing Bakhmatiuk and Piazza of illegally transferring assets under the RICO (Racketeer Influenced and Corrupt Organizations Act) statute. Gramercy's investment director, Robert Koenigsberger, had expressed frustration over the extended period of failed negotiations with Bakhmatiuk to restructure ULF's capital in line with international standards. Ukrlandfarming had consistently denied the accusations.
Gramercy, an investment firm focused on emerging markets, manages about $5 billion in assets from its offices in Greenwich, Connecticut, London, and Buenos Aires. It is one of the largest investors in ULF.
Despite suffering UAH 1.2 billion in losses from Russia's invasion, Ukrlandfarming remains one of Ukraine's largest agricultural holdings. The company has been severely affected, particularly losing its Chornobaivka poultry farm in Kherson, the largest in Europe, where 4.5 million birds perished. Equipment was also looted by occupying forces. The war has also caused significant damage to facilities in Mykolaiv, Donetsk, and Kyiv regions.
ULF has been in default on a significant portion of its financial obligations since 2017, with total debts estimated at $1.65 billion, including $1.25 billion owed to international creditors and $400 million to Ukrainian banks.
Nicholas Piazza, a U.S. investor, is listed as the ultimate beneficiary of several companies tied to ULF. He is also the founder of SP Advisors, an investment company providing services in Ukraine and Eastern Europe, and has held several senior positions in investment firms across the region.