William Malcolm

Pavol Krupa Faces Insolvency Proceedings Over Arca’s Bills Of Exchange

In Prague, the Regional Court declared insolvency proceedings with the investor Pavel Krúpa due to the bankrupt company Arca Investments’ debts. Some of the bills of exchange of this company, from which Krúpa officially left in 2018, bear his signature as a guarantor.

The majority shareholder of Arca, Rastislav Velič, has also been facing insolvency proceedings.

Krúpa and Velič accuse each other of damaging the group and failing to fulfill their obligations.

An insolvency petition for Krúpa was filed by Lumír Zezulka, a businessman from Zlín. “Filing for insolvency is a logical response to the fact that Mr. Krúpa has long avoided resolving his obligations,” said Zezulka’s lawyer Jan Hladký from Hladký Legal.

Krúpa called the insolvency petition the work of his former partner from Arca Rastislav Velič. “Based on the forged signatures on bills of exchange and other documents, they are trying to gain an unjustified benefit,” says Krúpa. At the same time, he added that he would file a criminal complaint against Zezulka and Velič’s group.

“We will be happy to make the original bill of exchange available to the court and the police to assess the authenticity of the signature. At the criminal level, this is a matter for the management of Arca and Mr. Krúpa, who would deceive our client by issuing a bill of exchange with a false guarantor,” added lawyer Hladký.

In July 2018, according to a document published in the insolvency register, Zezulka concluded a framework agreement with Arca Investments on investment cooperation and the issuance of blank bills of exchange. “The debtor (Pavol Krúpa – ed. note) also signed the agreement,” the insolvency petition states. The annual bill of exchange for the amount of 13.8 million crowns was issued in July 2019. It was to be due a year later.

Other holders of bills of exchange are also considering joining the insolvency petition for Krúpa. “I expect my clients to join in the coming days,” said lawyer Pavel Korman, representing some of the creditors.

Arca Investments has 1,889 creditors to whom it owes 18.6 billion crowns. A total of 84 percent of liabilities are issued bills of exchange. According to the group based in Slovakia, most bills were sold in the Czech Republic. It is the place of the insolvency “monster trial” that the courts now decide.