UkrLandFarming's investor Gramercy launches claims against Bakhmatiuk, Piazza in USA

KYIV. Dec 9 (Interfax-Ukraine) – U.S. Gramercy Funds Management LLC on December 7 filed a lawsuit in the U.S. federal court against the owner of the agricultural holding UkrLandFarming (ULF) Oleh Bakhmatiuk and U.S. businessman Nicholas Piazza over assets transfer under the Racketeer Influenced and Corrupt Organizations (RICO) Act, but UkrLandFarming denies these accusations.

According to a Wednesday press release of Gramercy, in the U.S. action, Gramercy alleges there was a "complex, multi-faceted scheme" designed to maintain control over ULF and its subsidiary Avangardco IPL (AVG) and to interfere with Gramercy’s ability to recover its investment.

In addition to claims under RICO, the U.S. complaint includes claims for fraud, tortious interference, aiding and abetting and civil conspiracy, and seeks, inter alia, treble damages under RICO.

"We completely rule out these accusations and are ready to defend our position in courts," UkrLandFarming told Interfax-Ukraine.

Gramercy said that the company has also commenced a separate proceeding in Cyprus regarding transfers of material assets from ULF Group to a Cypriot entity owned and controlled by Bakhmatiuk. The Cyprus action seeks a worldwide freezing order on Bakhmatiuk’s assets. Bakhmatiuk and others have already appeared in court through counsel to defend the Cyprus action. A further hearing on the freezing order application is currently scheduled to take place on January 28, 2022.

It also quotes Gramercy’s founder and Chief Investment Officer Robert Koenigsberger who said that "Gramercy devoted substantial time and resources to attempting to bring Mr. Bakhmatiuk to the table in good faith to negotiate a comprehensive restructuring of the company’s capital structure in accordance with international standards."

"If a fair deal cannot be reached, Gramercy is left with no choice but to resort to litigation given that it has uncovered transfers of more than a billion dollars of company assets that were not disclosed, and which have caused Gramercy’s investors substantial losses," he said.

ULF said they were surprised and disappointed by the position of Gramercy, with which they had a constructive dialogue over the past two and a half years.

"They know that our company, in such difficult conditions, is making every effort to save assets and jobs. At the same time, it is well known that the persecution of our company by the Ukrainian law enforcement agencies has led to the halt of some enterprises and the loss of jobs," ULF said.

ULF said that the company’s assets "have not been taken out anywhere – they work in Ukraine."

"And the rights of all our creditors will be ensured equally in accordance with the concluded agreements," the company added.

The holding said that they are ready to defend its rights and rights of all creditors in courts of all jurisdictions, but they are supporters of a constructive dialogue.

"We hope that the story with the Gramercy Funds Management LLC claim will be resolved constructively within the framework of an impartial trial," ULF said in a comment.

Gramercy is a dedicated emerging markets investment manager based in Greenwich, Connecticut (the United States) with offices in London and Buenos Aires with assets of approximately $5 billion under management.

Gramercy said that it is one of the largest investors in ULF.

According to the law360, the lawsuit was filed in Wyoming, and Piazza, as indicated in the release of Gramercy, lives there. The plaintiff is Gramercy Distressed Opportunity Fund II LP.

Interfax-Ukraine has requested information from Bakhmatiuk and Piazza about the filed suit, but so far there is no comment. At the same time, representatives of Bakhmatiuk said that his position on this issue will be presented in the near future.