A ruling in favour of COBALT’s client has come into force, deeming the insolvency proceedings initiated against Delfi AS by Ekis & Co-Positioning and Consulting SIA to be unfounded. This ruling clearly reinforces the finding that insolvency proceedings must not be abused to recover sums of money that are the subject of a legal dispute.
The court was required to assess the insolvency filing, despite the commercial dispute between the parties, being fundamentally a matter that should have been resolved through standard civil litigation procedures. Delfi’s strong financial position, evidenced by its 2024 Latvian turnover of EUR 5.53 million and a profit of EUR 594,200, further attested to the company’s stability.
In its ruling, the court reiterated that the institution of insolvency proceedings cannot be used as a means of accelerated debt recovery. This is because the objective of insolvency proceedings, as per Section 1 of the Insolvency Law, is to facilitate the fulfilment of obligations by a debtor experiencing financial difficulties and to restore its solvency. Furthermore, the court highlighted the principle of good faith, enshrined in Section 6, Paragraph 8 of the Insolvency Law, which dictates that parties involved in the insolvency process must exercise their rights in good faith.
Delfi was represented in court by COBALT Specialist Counsel Sergejs Rudāns.
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