KREMLIN DEFAULTS ON AUCTION PAYMENT IN COLOGNE (case #093 K 025/07)

 SEDELMAYER vs. RUSSIAN FEDERATION

KREMLIN DEFAULTS ON AUCTION PAYMENT IN COLOGNE

(case #093 K 025/07)

+

NEXT PUBLIC AUCTION HELD IN COLOGNE FEBRUARY 06, 2014

(case #093 K 37/07)

Just a few days short of the 2014 Sochi Olympic Winter Games the Kremlin has defaulted on a payment in the value of Euro 2,110,000 to the city court Cologne to be distributed to Franz J. Sedelmayer, Russia's private creditor. A Kremlin owned state unitary enterprise had placed the winning bid on November 19, 2013.

When the distribution meeting was held in the city court Cologne on January 31, 2014 the Kremlin's counsel declared: „We have decided not to pay!“

While the creditor was not caught by surprise, it does appear the Kremlin was not made fully aware by counsel which conseqences under German civil and criminal law could arise under such circumstances. Thus, the auction will simply be rescheduled, additional execution proceedings will start, and fraud and purgery charges are currently being filed against Kremlin officials and respective German counsel.

The real estate in question will remain attached and cannot be alienated by the debtor or anyone else until such time as the recorded debts have been paid in full. 

The Kremlin's move does not make much sense as it can well lead to additional costly multi-party litigation.  As a matter of fact,  every single German bidders, who had lost out in theoriginal auction,  is now entitled to bring an individual claim for lost profit, worth together several times the value of the real estate in question.  Evidence is no problem, as such claims can be based on public court records. The defendants? The Kremlin state unitary enterprise managing Russia's overseas assets and Germany's largest law firm, CMS Hasche Sigle!  

On February 06, 2014 the next auction will be held:

City Court Cologne, Reichenssperger Platz 1, Cologne at 09:30h, Room 37

Background: Franz J. Sedelmayer, a German citizen residing in France, has obtained sizable Swedish judgments and an arbitral award against the Russian Federation between 1998 and 2013, under the auspices of the Stockholm Arbitration Institute. The case concerned the illegal expropriation of Sedelmayer’s holdings in Saint Petersburg, Russia, in 1995 by the late Russian President Boris Yeltsin. Russia has since categorically refused to compensate this creditor. Sedelmayer managed to auction off Russian Federation property in Germany, making him the only successful private creditor of Russia to date.



Franz J. Sedelmayer
Creditor