OCTOBER 2020

The interests of the former director of a bankrupt company were defended.

The firm’s lawyer successfully represented the interests of a client — the former director of a bankrupt company — in civil proceedings for recognising the bankruptcy as fraudulent.
The administrator of the bankrupt company applied to the court asking to declare the company’s bankruptcy fraudulent and to rule that the bankruptcy was caused by deliberate actions of the former director and the shareholders of the company.
After examining the case, the court declared the bankruptcy of the bankrupt legal entity fraudulent, but the court did not identify the firm’s client fault with regard to the bankruptcy. The court found that the insolvency administrator had failed to prove any instance of wrongful act by the firm's client as a director. The court accurately assessed the start and the end of the director’s duties towards the legal entity and its creditors, identified the actions of individual persons who led and managed the company during different periods, and found which persons contributed to the bankruptcy of the company and which did not.
According to the long-established case law, bankruptcies are often declared fraudulent only in terms of the existence of formal indications of fraudulent bankruptcy, while all members in the management bodies and shareholders of a bankrupt legal entity are found guilty of bankruptcy without individualisation, leaving the matter to be resolved during damages recovery proceedings.  This is why the victory achieved by the firm’s lawyer and the practice developed during the case are particularly important for the economic and social environment, influencing the business conditions and reducing the fear often experienced by entrepreneurs because of liability of the managers and the shareholders of bankrupt companies, which has recently become essentially unlimited.

A client of the firm was awarded adequate remuneration for the servitude established for the benefit of Vilnius City Municipality Administration.

The firm’s lawyer defended a client’s interests that were violated by the establishment of a non-remunerated servitude on the client’s land plot.
The dispute arose after the Vilnius City Board in 2000 authorised the development of a detailed plan for a territory of about 95 ha located in Vilnius, between Gabijos Street and Ukmergės Hwy, and approved the conditions for drawing up a detailed plan. The land plot of the firm’s client was also included in the planned area.
The aforementioned land plot contained the planned engineering infrastructure of the quarter; therefore, it was planned to take the land plot for public needs, but in 2006, according to a decision of the head of Vilnius County, the land plot was divided into several parts, and an servitude was established for one of them: the right to install and operate engineering networks, to build roads, to walk and to drive vehicles at any time of the day to adjacent areas free of charge throughout the land plot until the land plot is transferred to the Council of Vilnius City Municipality. Once the required servitude had been established, the Administration of Vilnius City Municipality refused to take this land plot for public needs and to pay compensation for it.  
The court, having examined the situation, found that the servitude established for the land plot of the firm’s client—because of its broad definition, the nature of the constraints, the scope, and the open-ended nature—means, by its very nature, a complete restriction of the ownership right of the owner as the owner’s property is used to meet public needs; therefore, such servitude must be remunerated at the market value of the land plot, set after an individual valuation of the property as at the day of the decision to establish the servitude.

A victory was achieved in a tax dispute, which revealed the content of the principle of the neutrality of VAT.

SPES lawyers defended a client’s interests in a tax dispute against the State Tax Inspectorate, according to which the firm’s client owed over EUR 100,000 of tax arrears.
The tax administrator sought to demonstrate that the client of the firm had committed VAT fraud, which allegedly led to VAT not being paid to the state budget.
The lawyers of the firm succeeded in refuting the assumptions and arguments of the State Tax Inspectorate and in proving that the client had reasonably included input VAT in the deduction of VAT, as the right of the client to deduct VAT was not limited during the period being examined, and the purchase transactions were legal and real.
An examination of the tax dispute established that the tax administrator in the dispute situation had infringed the principle of the neutrality of VAT, which means that a taxpayer that carries out an economic activity and is entitled to a deduction of VAT remains neutral with regard to that tax, since the taxpayer may deduct the amount of tax of goods and services, which were used directly for the purpose of carrying out the taxpayer’s taxable transactions, from the payable amount of VAT, and it is the VAT deduction mechanism that ensures the proper functioning of this principle. The decision was based on the case law of the CJEU, which explains that the taxpayer has the right to deduct all of the charged tax (see, for example, the CJEU judgment of 14/02/1985 in the case Rompelman, 268/83, paragraph 19; the CJEU judgment of 26/05/2005 in the case Kretztechnik AG, C-465/03, paragraph 33); the system of reference is intended to fully exempt the entrepreneur from the VAT burden due or paid in connection with any economic activity. The common VAT system therefore ensures the neutrality of taxation of any economic activity, regardless of its purpose or outcome, provided that the activity in question is, in principle, subject to VAT (the CJEU judgment of 03/03/2005 in the case Fini H v. Skatteministeriet, C-32/03, paragraph 32).

  • SEPTEMBER 2020

    The court ruled on the right of the insurer to change the grounds for refusal to pay out an insurance benefit.We defended the client’s interests in a civil dispute with the insurance company over award of the insurance benefit and damage. The court which has heard the case in its judgement, inter alia, stated that the insurer must investigate the circumst...

  • AUGUST 2020

    The court has resolved a dispute between the Ministry of Foreign Affairs and a citizen of the Republic of Lithuania imprisoned in the USA on whom a capital punishment has been imposed.An attorney-at-law of the law firm has successfully represented a client, i.e. the Ministry of Foreign Affairs, in the dispute with a citizen of the Republic of Lithuania imprison...

  • JULY 2020

    We have proven that our client conducted a lawful and transparent public procurement. We represented our client, i.e. waste management system organiser, in a dispute which has arisen out of the legal relations of public procurement. The attorneys-at-law of the law firm successfully proved that the client conducted a transparent and lawful public procuremen...

  • JUNE 2020

    The court ruled on the possibility of applying subsidiary civil liability to the head of a legal person in case the company does not properly fulfill the obligation to pay taxes to the state on time. Attorney at Law of our firm succeeded in defending a client’s interests in the court of appeal. The State Tax Inspectorate (STI) sought to prove that be...

  • APRIL 2020

    We successfully represented a client in a court of appeal in a civil case for damages caused by unfair competition. The panel of judges of the Civil Cases Division of the Court of Appeal of Lithuania, having examined the appeal prepared by advocates of the Law Firm, reversed the judgment of the court of first instance unfavourable for the client. In its judgmen...

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