Civil Liability of Banks’ Shareholders and Related Parties: Practical Considerations

by Andrii Chornous

In the period of 2014-2016 the National Bank of Ukraine carried out a “great bank cleansing”, which resulted in the withdrawal of 103 banks from the Ukrainian banking market. Since the assets of some of the insolvent and liquidated banks were insufficient to cover all debts, claims against the related parties of banks and shareholders whose actions contributed to insolvency are regularly considered by those creditors that have suffered losses. Pursuant to the data published by the Deposit Guarantee Fund of Ukraine (the “DGF”), 49 banks in Ukraine remained in the process of liquidation as of 8 September 2020. Consequently, lawsuits on collection of damages against the related parties of banks may remain an effective mechanism for creditors attempting to recover their losses.