Case study
Subsidiary indictment resulting in a conviction
The Client
Our client was an entrepreneur operating in the medical and herbal sector, running a limited liability company whose shareholders were three individuals. One of the shareholders – who simultaneously held the position of sole director – together with third parties, established a new company and commenced competing business activities.
As part of a planned and consistently executed course of conduct aimed at a hostile takeover of our Client’s enterprise, a number of legal and factual actions were undertaken. First, the accounting office was changed and all accounting documentation was collected from the previous firm, a significant portion of which was subsequently concealed and has not been recovered to this day. Acting under the guise of ordinary commercial relations, the perpetrators entered into exceptionally unfavourable contracts on behalf of the company, refused to convene a shareholders’ meeting for fear of the director’s removal, and removed the company’s merchandise which, pursuant to a fictitious agreement, was transferred to the newly established competing company, enabling it to commence operations immediately. In addition, stylish and antique furniture was removed from the main business premises and used to furnish the new entity’s premises. The perpetrators also unlawfully copied a database containing customer data and proprietary herbal blend recipes, while the existing employees were employed at the new retail outlet. Furthermore, the perpetrators ceased paying rent and servicing loans, thereby leading to the loss of the premises and exposing our Client’s company to the risk of insolvency. As a result, the new company took over the goods, equipment, customer base, suppliers and know-how, commencing full-scale operations at the expense of our Client’s company.
Despite the evident scale and multifaceted nature of the case, the public prosecutor found no elements of a criminal offence and concluded that the dispute was of a purely civil-law nature, which resulted in the discontinuation of the proceedings. Following an appeal lodged by our law firm, the Regional Court set aside the decision to discontinue the proceedings and ordered the prosecutor to continue the investigation. Nevertheless, the prosecutor once again discontinued the case, relying on the same unfounded grounds.
In response, our team prepared and filed a subsidiary indictment with the court, thereby assuming the role of the public prosecutor in a case concerning serious offences prosecuted ex officio. As a result, the District Court convicted the defendants, and the Regional Court upheld the judgment in full, fully endorsing our position.
Specialisation:
The challenge
The task of the team was to demonstrate that the case was of a criminal nature and that our client’s business partner had engaged in a hostile takeover of the company’s assets as well as unlawful conduct in the field of competition law. The proceedings proved to be highly complex from both an evidentiary and legal perspective, particularly as the perpetrators relied on documents prepared by specialised lawyers, which was intended to give them confidence that they would face no consequences. One of the key challenges was to challenge an expert opinion that had formed the basis for the discontinuation of the proceedings and to identify evidence confirming the unlawful transfer of assets carried out without any accounting documentation.
The Result
We filed a subsidiary indictment, charging, amon others, our Client’s business partner with the commission of seven criminal offences, including a hostile takeover of the company’s assets and acting to the detriment of the company, in proceedings concerning offences prosecuted ex officio, conducted without the participation of a public prosecutor who had “withdrawn” from the case.
We successfully challenged the expert opinion concerning the comparative analysis of the database, demonstrating deficiencies in the expert’s methodology and, as a consequence, in the assessment of the evidence adopted by the public prosecutor.
Despite attempts to implicate our Client by alleging the theft of documents, we proved that it was the business partner who had unlawfully taken possession of and misappropriated them.
We succeeded in obtaining a conviction of the defendants and an award of damages in favour of our Client, despite the public prosecutor having discontinued the case and contrary to his assessment of the evidence.
