We are representing Põhja-Eesti Hoiu-laenuühistu in a dispute with the savings and loan association ERIAL.
The dispute began with an e-mail
The dispute began last year, when ERIAL started litigation with the Põhja-Eesti Hoiu-laenuühistu due to an e-mail sent by the latter to its members. In November 2019 Põhja-Eesti Hoiu-laenuühistu sent an e-mail in which they warned its members that ERIAL’s economic activities were unsustainable and could be displaying features of a pyramid scheme.The police have also raised similar doubts about ERIAL. ERIAL is taking Põhja-Eesti Hoiu-laenuühistu to court to refute what it calls the incorrect information provided by them. Our counsel Karl Kask is representing Põhja-Eesti Hoiu-laenuühistu in this case.
The savings and loan association ERIAL is to cease to exist
In February this year, ERIAL withdrew its licence to provide financial services and announced the submission of a reorganisation application. The cooperative is trying to leave the Savings and Loan Associations Act with stricter requirements and become a commercial association. According to information provided by them, they are planning to repay 16 million euros by completing and selling real estate developments that are currently ongoing. Commenting on ERIAL’s reorganisation process in an interview with Äripäev, Kask confirmed that changing the form from a savings and loan association to a commercial association before the reorganisation procedure is not prohibited, but changing the business form during the reorganisation process is not usual. These are different cooperatives that operate under different laws. “However, depositors with the expectation of high interest rates initially placed their money in a financial institution, rather than a regular commercial association,” Kask stated in his comments to Äripäev.
Our client team
Our counsel Karl Kask, representing Põhja-Eesti Hoiu-laenuühistu, has been working as a lawyer since 1994. He has participated in resolving hundreds of court disputes before both civil and administrative courts.
Karl also has extensive experience with reorganisation proceedings; he has successfully represented creditors such as TERE and Baltika in reorganisation proceedings.
