Pysarenko Oleksandr, Attorney-at-Law, MBA Degree.

Based on experience and practical knowledge, associated with court cases in Ukraine referring claims for settlements with shareholder in case of withdrawal from limited liability company, we can assume that the major portion of the LLC entities tends to insist on pay out of the sum, calculated on the basis of book value of the company assets (with relevant correction of book value (its decrease) prior to this), while withdrawing shareholders are interested to receive compensation based on the market value of the LLC. Hence, in such cases there is a necessity for conduction of legal expertise aimed at calculation of the compensation if the LLC shareholder withdraws, as well as at relevant estimation of the LLC assets.
Since the LLC entity rejects the possibility for the voluntary appeal to subject involved in the estimation activities provision during pre-trial proceedings in order to receive the market value of its assets, and if the claimant disagrees with objective character of such estimation, so the necessity arrives, within the framework of the court case conduction, to compile and provide by all appropriate evidences the market value of LLC assets as of the date of the LLC shareholder withdrawal.
In this category of litigations, generally, the defendant makes a reference to the current legislation which does not stipulate the obligatory pay out of the compensation, computed on the basis of the market value of the entity, by the LLC in favor of the withdrawing shareholder.
Ad verbum, this remark complies with the effective legal norms, but based on rule of law and principles of reasonableness, good faith and justice of civil legal relationships, it is and shall be refuted.
Besides this, the rejoinders are especially active in hot debates, concerning inclusion of proprietary rights of possession of rented property (assets) into general book value of the LLC assets, which will serve for computation of the compensation payment to be conducted in favor of the withdrawing shareholder.
However, Article 190 of the Civil Code of Ukraine specifies exactly that such proprietary rights of possession are a part of assets, moreover, the Law “On estimation of assets, proprietary rights and experts’ estimation activities in Ukraine” sets out and rules the order for conduction of such proprietary rights estimation.
In court cases, which out attorneys are involved in, estimation of the LLC entity assets in disputes covering the cases of the LLC shareholder withdrawal is conducted based on a solicitation submitted on behalf of the interested party to file the legal expertise.
As a rule, the courts define the legal examination conduction to be effected by the state scientific and research institutes of court expertise, but it is not an obligatory ruling. That is why, while pursuing such cases, it is worth appealing for conduction of legal examination by less work loaded expert in order to save time (in practice, for example, complex of expertise measures conducted by 3 laboratories of Kiev Scientific and Research Institutes of Court Expertise took 11 months in one of our cases).
Since the LLC co-party withdrawal date is settled within 12 months minimum before the court trials (term for compensation to the withdrawing shareholder per the Law, if otherwise is not stipulated by the charter), certain assets of the LLC entity can be absent as of the date of the court expertise conduction. The order of its conduction allows performing the legal evaluation expertise based on description and technical characteristics of the assets. That is why in favor of time saving, it is worth soliciting for conduction of exactly this sort of expertise.
As well as in order to achieve the case conduction to be less time consuming, in the solicitation, which addresses the issue of conduction of the relevant legal examination, it is worth petitioning the court to oblige the respondent to submit all the necessary documents directly to the assigned expert. Otherwise, one can not avoid a further possible petition compiling on behalf of expert to the court referring submission of additional papers to the court, and further cascading of such papers by the court to the respondent, by the respondent to the court, and, finally, by the court bodies to the expert.*

*The article is developed on a basis of the law office lawsuits.

Oleksandr Pysarenko, attorney at law, MBA degree,
Pysarenko Law Office. Kiev, Ukraine.

Tel.: +38 (044) 270 60 46