Forteam Investments Ltd. seizes the Świtalski family palace in Sowiniec

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Oct 28, 2020, 11:42 ET

WARSAW, Poland, Oct. 28, 2020 /PRNewswire/ -- The District Court in Poznań, Poland has granted a fourth injunction in favor of Forteam Investments Ltd., the investment firm owned by U.S. private equity fund Delta Capital Partners Management, in a dispute with Mariusz Świtalski. The court's decision seizes all of Druga-Sowiniec Capital's shares. All of Druga-Sowiniec Capital's assets, including the palace in Sowiniec, the surrounding grounds, as well as a polo club with 30 horses have been encompassed by the injunction.

The Sowiniec palace covers a 279-hectare park, a 3000-meter palace with 14 bedrooms, 24 bathrooms, an indoor pool and a tennis court. Also located on its grounds are a private marina on the Warta river, a helipad, runway, stables, two full-size polo fields and a riding hall. The entire property was valued at EUR 50 million in 2015.

The court ruling also applies to all Świtalski FIZ certificates and associated property rights, including shares in other companies controlled by the Świtalski family.

Further attempt to sell off assets prevented

Before the court issued its ruling on the fourth injunction, entities controlled by the Świtalski family had attempted to sell or otherwise transfer for no or inadequate consideration their assets to frustrate claims against them. On August 20, 2020, there was an attempt to redeem shares in Druga - Sowiniec Capital sp. z o.o. sp. k and subsequently issue new shares to Mr. Piotr Rogowski, a private individual. However, as a result of prompt action taken by Forteam, this fraudulent scheme was prevented. In the injunction issued in October, the court suspended the registration proceedings at the National Court Register to prevent further attempts to remove assets

"With this court ruling, we were able to seize the Świtalski's most important assets and prevent further assets from being concealed and siphoned out. This is another step that brings us closer to a just resolution of the dispute and enforcement of receivables resulting from guarantees given by Mr. Świtalski. Any person seeking to do business with the Świtalski group of companies should carefully check if the subject matteris not covered by one of our four injunctions," said Christopher DeLise, CEO of Delta Capital.

Three previous injunctions

The injunction obtained in October is yet another positive court ruling for Forteam. The first one, from February 2020, secured claims against Mariusz Świtalski and companies that he controls within Sowiniec Group. Despite this, Mariusz Świtalski went on to sell and hide his assets, forcing Forteam to apply for further injunctions. Another court ruling, obtained at the end of April 2020, covered a part of assets owned by Mariusz Świtalski's children. The third injunction concerns a 45.94% stake in Czerwona Torebka, which was unlawfully sold by Świtalski FIZ.

All four of the injunctions were obtained ahead of a ruling in a further civil proceeding against Mariusz Świtalski in connection with his breach of a guarantee agreement executed with Forteam Investments in 2015. Forteam's claim exceeds PLN 300 million.

Prior Actions Undertaken by Forteam

On May 8, 2015, Forteam purchased a 100% stake in Małpka S.A. from Czerwona Torebka. Małpka was the owner of the Małpka Express chain. In settling the transaction, Forteam sold its stake (16.18%) in Czerwona Torebka. Upon signing the sale agreement, the parties were aware of Małpka's difficult situation. The agreement, itself, noted that the parties realize that further considerable financing would be needed for the company to reach the break-even point.

Because of this, Mariusz Świtalski and Sowiniec Group also executed a Guarantee Agreement with Forteam, which provided Forteam with a guaranteed return on the Małpka investment if the Małpka Express store chain was later sold to a third-party. In connection therewith, Mariusz Świtalski submitted a written declaration that his personal assets were sufficient for him to fully discharge his obligations under the Guarantee Agreement.

When Forteam attempted to sell Małpka Express in 2018, it was unable to obtain consideration at or above the minimum sale price despite engaging a respected independent investment bank to run a robust sales process. Mariusz Świtalski did not exercise his preemptive rights to buy Małpka at that time for the guaranteed amount.

Accordingly, Forteam notified Świtalski on December 28, 2018 of his obligation to remit the monies owed to Forteam pursuant to the Guarantee Agreement. Notwithstanding, Świtalski and the companies have failed to pay any amounts due and owed to Forteam, which, in-turn, necessitated the filing of the injunction and civil lawsuits. As a result of Mariusz Świtalski's actions, Forteam was forced to take additional steps to secure part of his children's property and other entities to which Świtalski transferred assets that he owned.

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