The Nizhny Novgorod authorities have suddenly begun actively demonstrating their desire to bring back to life the Deka beverage plant, one of the region's once largest enterprises.
It seems that the region's leadership is ready to disregard the law regulations and common sense to do so. Will the attempts to return the enterprise to its former owner, who has already bankrupted the plant, be justified?
Deka's flagship brand, Nikola Kvas, was once unprecedentedly popular. The plant was one of the largest taxpayers in the Novgorod region, bringing almost a billion rubles annually to the regional budget. Everything came to an end in early 2019, when the plant went bankrupt with multibillion-dollar debts, and its owner, Moscow businessman Nikolai Levitsky, took all the documents of the company with him and safely left for his villa in Mallorca.
As a matter of logic, at this point, the law enforcement authorities should have been involved to look into deliberate bankruptcy and withdrawal of funds. The creditors had filed a complaint about this to the Attorney General's office indicating Deka's shady deals to the amount of more than 500 million rubles ($6.5 mln.) Boris Shapovalenko, the then temporary manager of Deka, had submitted statements about the revealed suspicious transactions made in the pre-bankruptcy period (2017-2018) by Deka by the companies of its beneficiary Nikolay Levitsky to law enforcement authorities four times.
The company had already run out of money to pay salaries to workers, taxes to the state, and to purchase raw materials, but found millions to buy out the trademarks from Levitsky's companies, never used by anyone. However, the investigators refused to find evidence of misappropriation of assets and fraud and did not initiate criminal proceedings on these counts, even in the case where Mr. Levitsky cheated the state of at least 30 million rubles ($345,120) in taxes and excise duties. As in the situation with dubious transactions, the tax avoidance schemes did not put Levitsky in the dock.
Not only do some representatives of law enforcement agencies have an inexplicable sympathy for Nikolay Levitsky, but also the Novgorod arbitration judge Oleg Pestunov, who is now in charge of the bankruptcy case of Deka. Thanks to his efforts, the old owner, Nikolai Levitsky, can return to the plant as the “new” owner at minimal expense to pay the company's debts. The court is ignoring the claims of creditors to whom Levitsky owes billions, but is very sympathetic to the demands of Innova Finance, which buys up the debts of the plant at 20-25%, and sometimes even at 10% of face value. At the moment, Innova has already bought up the debts for over 400 million rubles ($4.6.) With the help of the company's bankruptcy manager Maksim Lagoda who has been repeatedly accused of using the company's property for his purposes, Innova Finance has become the key creditor in the bankruptcy case, involving Deka. There is enough evidence that both Innova Finance and Maksim Lagoda are directly affiliated with Nikolay Levitsky.
Meanwhile, despite the opposition of most creditors and thanks to the support of the local arbitration court, Maxim Lagoda is preparing to sell the plant as a single lot. This way of selling the bankrupt's property is of common occurrence. A future investor buys all the enterprises to restore production, and the creditors get back their invested money proportionally. The situation at Deka is somewhat different. Maxim Lagoda has overvalued the plant's property, mortgaged in parts, so much so that the fence around the plant, for example, has increased in value many times over.
In this case, some buildings instead of tens or hundreds of millions became worth 2 rubles ($0.02.) This is not a crude estimate but the exact new value according to the assessment. Therefore, those creditors, whose collateral property after revaluation has fallen sharply in value, risk getting almost nothing but Innova Finance, more precisely, Nikolay Levitsky, will get a significant sum. Purchasing the debts of Deka with a huge discount and then purchasing the plant at auction which was organized by Maxim Lagoda himself, Innova Finance will simply get back the major part of the money spent on the purchase of the enterprise. Nikolay Levitsky will become the owner of the plant again, having paid only a tenth of the billion-dollar debts of the bankrupt enterprise.
So far, it has been difficult to understand why law enforcement authorities ignore Levitsky's dubious transactions and turn a blind eye to Maksim Lagoda's apparent violations of bankruptcy law. The press conference of Novgorod Governor Andrei Nikitin cleared the air. Mr. Nikitin did not simply endorse the decision of the arbitration court to sell the enterprise as a single complex. Before a large audience, the Novgorod Governor said that he had asked Maksim Lagoda to do so and promised, as Head of the region, tax benefits and all sorts of preferences to the new investor. Considering that we mean the same Levitsky “new investor”, Nikitin's desire to help him at the expense of the regional budget looks, to put it mildly, rather ambiguous.
Lagoda's actions surprisingly coincide with the idea of the Novgorod Governor. Andrei Nikitin has long declared his plans to restore Deka as soon as possible, complaining that the plant's shutdown has deprived the budget of taxes. Although three years ago they already tried to restore the production. The Dekalitr company offered the plant cooperation on a give-and-take basis when Deka was completely financially paralyzed. The system did not work for long, and the same Nikolai Levitsky demanded that all profits from the activities of Dekalitr go to Deka, which he had driven into debts. Governor Nikitin said that the Novgorod region receives few taxes from this production scheme. As a result, Dekalitr went bankrupt. After the victory over Dekalitr, the region received no taxes or wages for the next two years. In the end, the creditors will get even less money. The equipment and the plant itself for a couple of years without heating, security, and maintenance is slowly but surely falling into a substandard condition. It is clear why this happened. Dekalitr turned out to be an independent commercial structure, not another brainchild of Nikolay Levitsky, who is not welcome in the Novgorod region.
These facts give the impression that all the governor's actions around the plant are aimed only at returning Deka to its former owner, Nikolai Levitsky. The facts do not take into account the damage that has already been done to the company's creditors, the budget, and the reputation of the region. It was no coincidence that at the same press conference the Governor said that in negotiations with the bankruptcy trustee, the administration found complete understanding.
The goal of Maksim Lagoda and Innova Finance is to return the asset to Levitsky at minimal cost, which no one doubts. But is it in the interests of the Novgorod region? Or do the Novgorod officials simply believe that Levitsky has not bled the plant for money and the region and see it as their duty to help him? The only question is on what terms.