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Sorainen Successful for Bankrupt Credit Union Taupkase in Lithuania's Court of Appeal

Sorainen Successful for Bankrupt Credit Union Taupkase in Lithuania's Court of Appeal

Lithuania
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Sorainen has successfully represented bankrupt credit union Taupkase (under administration by Klaipedos Administratoriu Biuras) in the Lithuanian Court of Appeal in a case involving the recognition of a credit union share as a deposit.

According to Sorainen, "the credit union share owner was [asking] the court to recognize additionally-acquired credit union shares as a deposit agreement." According to the firm, "according to the Law on Insurance of Deposits and Liabilities to Investors, deposits are insurable and insolvency proceedings are considered an insured event. This means that normally when a credit union files for bankruptcy, deposits up to EUR 100,000 are paid to depositors. Under national law and case law, shares are not insured because in essence they are not deposits but securities. Therefore, in the event of the bankruptcy of the credit union, the value of the share is not returned to the shareholder. For these reasons, the claimant (the credit union share owner) sought [to have] the credit union shares recognized as a deposit, in which case he would have been paid the full value of the share."

According to Sorainen, "although the court of the first instance ruled in favor of the claimant ... the Lithuanian Court of Appeal overturned this decision and issued a new ruling, particularly important in the light of the increasingly frequent disputes between credit union share owners and bankrupt credit unions."

Sorainen's team consisted of Counsel Kazimieras Karpickis and Associate Greta Kubiliunaite.

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