Riga district court initiates cross-border insolvency proceedings setting court precedent in Latvia

On 28 February 2024, the Riga District Court in civil case No C771214923 initiated insolvency proceedings in Latvia against a company registered in Ireland. This is one of the first cases in Latvia where the court has applied the test for establishing the location of a debtor’s centre of main interests (COMI) in line with the Recast Regulation on Insolvency Proceedings 2015/848.

Our experts Anete Puče-Dimitrovska and Kristers Losāns represented the claimant in the case and successfully demonstrated to the court that the company, despite being registered in Ireland, conducted its operations from office in Riga. Therefore, creditors had reasonable assumption that all legal relations with the company in question will be handled in Latvia.

The initiated insolvency proceedings in Latvia will facilitate creditors’ ability to submit claims and will streamline the process of debt collection in respect to former P2P and P2B online investment platform operating from Latvia. It also enhances the clarity regarding the assets of the company under scrutiny, thus promoting more effective proceedings.

This significant decision not only sets a precedent for future cases but also highlights the importance of accurate COMI determination in cross-border insolvency matters, ultimately benefiting creditors and ensuring more efficient proceedings.