PrivatBank files suit against ex-owners Kolomoisky, Boholiubov in U.S.

Ukraine's PrivatBank has filed a lawsuit with Delaware Court of Chancery (the United States) against former co-owners of the bank Ihor Kolomoisky and Hennadiy Boholiubov, as well as other individuals and legal entities, according to a posting on the website of the bank.

According to a posting of the court's website, the civil lawsuit was filed on May 21, 2019. No information when the lawsuit could be heard by judges is available on the website.

PrivatBank said that by this U.S. complaint, PrivatBank is seeking redress in respect of losses amounting to hundreds of millions of United States dollars, which PrivatBank asserts it has suffered as a result of various unlawful acts perpetrated against it by its former owners, their close associates Mordechai Korf, Chaim Schochet and Uriel Laber, and various US-registered companies in which those individuals are and have been involved.

According to the report, the U.S. complaint arises out of a series of schemes which bear the hallmarks of fraud and which, as PrivatBank asserts, were orchestrated by Kolomoisky and Boholiubov, together with the other defendants, to acquire hundreds of millions of dollars-worth of assets in the United States through the misappropriation and laundering of the proceeds of corporate loans issued by PrivatBank whilst under the control of its former owners.

As reported, referring to Law360 ezine, the alleged scheme by the individuals and companies involved "had a particularly profound impact" in Delaware, where the allegedly fraud-supporting companies were formed, the suit said, and in Ohio, where cash was used to buy up valuable commercial real estate. Other investments were funneled to cities in Texas, Florida and Kentucky, among others, with activities in more than a dozen states implicated. The money went to acquire "strategically important" steel and ferroalloy production facilities located in Ohio, Michigan, West Virginia and Kentucky, among other locations, according to the suit. Substantial commercial property investments were also made in locations that included Dallas and Cleveland.

The suit accuses all involved of unjust enrichment, fraudulent transfers, civil conspiracy and alter-ego liability.

Joint Stock Commercial Bank PrivatBank is represented by Abrams & Bayliss LLP, and Quinn Emanuel Urquhart & Sullivan LLP, Law360 said.

Ukraine's government, at the recommendation of the National Bank of Ukraine (NBU) and former shareholders of PrivatBank, the largest of whom at that time were Kolomoisky and Boholiubov, on December 18, 2016 decided to nationalize PrivatBank, the largest Ukrainian financial institution at the time. The ex-owners of the bank consider the nationalization, as a result of which they had completely lost their shares, to be illegal, whereas PrivatBank and the state demand additional compensation from them for damage. At present, the parties are engaged in litigation both in Ukraine and in foreign jurisdictions.