Supreme Court judge Aigars Strupiss indicated that the most widespread violation in these processes was a failure to analyze all materials and evidence, for instance, a failure to analyze a debtor’s transactions such as selling off assets shortly before filing for insolvency.
Strupiss also noted that in nearly 40 of the 44 cases assessed by the panel of experts the Supreme Court had overruled the lower court’s verdict and that this fact shows that in most cases the judiciary is able to resolve problems in insolvency processes.
Meanwhile, former Supreme Court judge Kalvis Torgans, who was one of the experts assessing the insolvency cases, disagreed with the panel’s conclusions, citing debates on how to distinguish significant violations from insignificant irregularities. Torgans pointed to situations where a seemingly unimportant procedural error has caused substantial losses to creditors.
Upon hearing the report, the Judicial Council decided on several further steps, including the report’s publication and forwarding the information to the Prosecutor General’s Office.
The panel of experts examined a number of court cases over insolvency processes that have been heard between 2008 and 2014.
Insolvency administration is a lucrative and even fatally dangerous profession in Latvia. Foreign investors have long pointed out systematic abuse within the sector.