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Civil case No [anonymised]

Judicial proceedings No [anonymised]

Categories of the procedural decision: 2.2.2.8.2; 3.2.6.1

VILNIUS REGION DISTRICT COURT

JUDGMENT

IN THE NAME OF THE REPUBLIC OF LITHUANIA

9 June 2025

Ukmergė

Judge [anonymised] of the Ukmergė Chambers of Vilnius Region District Court,

with [anonymised] as court clerk,

with the participation of [anonymised], advocate’s assistant, representing the claimants [anonymised] and [anonymised],

the representative of the third party, [anonymised],

[anonymised] the claimants [anonymised], [anonymised] not taking part;

the representative of the defendant, a State Enterprise, [anonymised];

the representative of the third party, [anonymised];

in a public court hearing, in oral proceedings held remotely, examined the civil case on the amended claim of the claimants [anonymised] and [anonymised] for recognition of property as the shareholder’s property, the defendant being a State Enterprise and the third parties being -, [anonymised], -

The court

has established:

1. The claimants applied to the court with an amended claim asking the court: 1) to recognise that the claimants [anonymised] and [anonymised] own by right of ownership: (i) a land plot located at [anonymised], unique No [anonymised], (ii) a building – a grain warehouse, located at [anonymised], unique No [anonymised], (iii) a land plot located at [anonymised], unique No [anonymised]; 2) to cancel the restriction – the entry “debt for housing” (Cooperative “[anonymised]”, legal entity code -) – on the building, the grain warehouse located at [anonymised], unique No [anonymised]; 3) to cancel the restriction – the entry “debt for housing” – on the land plot located at [anonymised], unique No [anonymised]; 4) to award to the claimants [anonymised] and [anonymised] from the defendant the litigation costs incurred, which will be submitted before the case is heard.

2. On 14 April 2025 the defendant, a State Enterprise, submitted a response in which it stated that, if after a full and comprehensive examination of the evidence in the case the court is satisfied that there are grounds to uphold the application, the State Enterprise will not object to the claim being upheld. The defendant asks that the claim be examined at the court’s discretion, without the participation of the representative of the State Enterprise Turto Bankas, and that the request for litigation costs be dismissed.

3. On 10 April 2025 the third party - (hereinafter — -) submitted a response in which it asks that the judgment in the civil case be made at the court’s discretion, on the basis of the evidence submitted (and collected) in the case, and asks that the case be examined without the participation of its representative.

4. On 25 April 2025 the third party - submitted a response stating that the question of the merits of the claims is to be decided by the court after examining the case on the merits, assessing all the evidence collected in the case and examining the factual circumstances relevant to the case indicated by the claimants and established by the court.

5. On 19 May 2025 the third party [anonymised] submitted a response stating that on 6 September 2010 [anonymised], notary of the district, certified (Reg. No [anonymised]) a statement by [anonymised] that UAB - (code [anonymised]) had settled in full under the sale and purchase agreement certified on 29 April 2010 by [anonymised], notary of the district, Reg. No [anonymised], and had paid 82700,- (eighty-two thousand seven hundred) litas. It should also be noted that on 2 December 2010 the contractual mortgage (code: -) was deregistered after the debtor had performed its obligations. [anonymised] confirmed that all the factual circumstances confirming the conditions for cancelling the restriction (entry) “debt for housing” on the land plot located at [anonymised], unique No [anonymised], are present.

6. In the claim, the claimants stated that [anonymised] was the sole shareholder of the former UAB - (legal entity -) (hereinafter also the Company). The Company was established by [anonymised] while married to [anonymised], and therefore the shares were the spouses’ joint common property. On 26 September 2023 a notice of intended initiation of liquidation on the initiative of the Register manager under Article 2.70 of the CC was issued, on 8 January 2024 a decision to initiate the liquidation of the legal entity was made (Article 2.70 of the CC), and on 13 January 2025 a decision to liquidate the legal entity was made (Article 2.70 of the CC). After the Company was deregistered, immovable property remained registered in its name (hereinafter the Immovable Property): (i) a land plot located at [anonymised], unique No [anonymised]; (ii) a building – a grain warehouse, located at [anonymised], unique No [anonymised]; (iii) a land plot located at [anonymised], unique No [anonymised].

7. At the court hearing on 20 May 2025 the claimants’ representative repeated the circumstances and claims set out in the claim and additionally stated that the claimants have settled for the property acquired and do not know why the debt entries were not cancelled in the registers. She stated that the seller of the building – the grain warehouse located at [anonymised], Cooperative “[anonymised]”, has been deregistered, and in view of this she asks for the debt entry to be cancelled, stating that [anonymised] has settled with the seller. As regards the restriction on the land plot located at [anonymised], she stated that settlement is confirmed by the documents submitted to the case. She stated that UAB - was deregistered - because it did not submit financial statements, the notice of deregistration was not served, and a possible reason is an incorrectly stated address. She stated that UAB - has no debts and the company did not carry on active business, as the documents submitted show. She could not explain why it did not carry on business; this is already the fourth similar case, and suspending activity was the shareholder’s choice. Financial statements were not submitted because there was no accountant; the obligation to submit reports was understood. In an analogous case in Utena court the claim was upheld, the court dismissed the request for litigation costs, and the judgment was not appealed. The representative stated that no calculation and justification of litigation costs has been submitted in this case, the claimant decided not to submit one, and the representative confirmed that the request for compensation of litigation costs is withdrawn (audio recording of the court hearing of 20 May 2025, 13 min 00 s – 13 min 35 s). The claimants’ representative stated that the situation with Cooperative “[anonymised]” is the same as with the third party [anonymised], except that the claimant could not join Cooperative “[anonymised]” to the case because it has likewise been deregistered and there is no interested person left. The claimants have no possibility of obtaining documents from the notary because she no longer practises, the notary appointed in her place does not have the documents, and the claimants did not apply to the archive.

8. At the court hearing on 20 May 2025 the representative of the third party - stated that it does not object to the claim being upheld and leaves the question to the court’s discretion.

9. At the court hearing on 20 May 2025 the third party [anonymised] stated that it had not known about the liquidation of the legal entity and that it had sold immovable property, 5–6 land plots, to more than one of the claimants’ companies. When the land plot located at [anonymised] was being sold, the claimant could not settle in full and a mortgage was created; the third party confirms that the claimant later settled in full. Later a statement on settlement was drawn up before notary [anonymised]; afterwards the settlement was possibly not registered.

The court

finds:

the claim is upheld.

Recognition of property as the shareholder’s property

10. Under Article 2.70(1) of the CC, the manager of the Register of Legal Entities (hereinafter also -) has the right to initiate the liquidation of a legal entity where at least one of the circumstances listed in points 1–7 of Article 2.70(1) of the CC is present, one of which is relevant to the examination of this case – the legal entity did not submit the documents specified in Article 2.66(4) of the CC within twelve months after the expiry of the time limits laid down in the Civil Code or other laws for submitting those documents to the Register of Legal Entities (Article 2.70(1)(1) of the CC).

11. From the extended extract with history from the Register of Legal Entities of the State Enterprise “[anonymised]” in the case (hereinafter the - extended extract, vol. 1, e-case pp. 7–10) it was established that the State Enterprise “[anonymised]” initiated the liquidation of UAB - under Article 2.70 of the CC. The financial statements documents for 2010 were last submitted on 13 May 2016. On 8 January 2024 the State Enterprise “[anonymised]” made a decision to initiate the liquidation of UAB -, and on 13 January 2024 it made a decision to liquidate the legal entity. On 14 January 2024 UAB - was deregistered from the Register of Legal Entities of the State Enterprise “[anonymised]”. The claimant does not dispute these circumstances and agrees that for a number of years the company did not submit annual financial statements, which is why the liquidation procedure of UAB - was initiated and carried out. From the - extended extract discussed above it was also established that the company was registered from [anonymised], and that the claimant [anonymised] was the sole shareholder of that company from its establishment. Annual financial statements were not submitted to the State Enterprise “[anonymised]” for more than ten years.

12. From the extract of the Real Property Register of 29 January 2024 on a person’s property (vol. 1, e-case pp. 11–16), among the written evidence submitted, it was established that UAB - owned immovable property: a land plot located at [anonymised], unique No [anonymised], a building – a grain warehouse, located at [anonymised], unique No [anonymised], and a land plot located at [anonymised], unique No [anonymised]. The company had no creditors (vol. 1, e-case pp. 108–114). There is no data in the case on possible creditors of the company. The defendant, a State Enterprise, stated in its response that the State Enterprise will not object to the claim being upheld if after a full and comprehensive examination of the evidence in the case the court is satisfied that there are grounds to uphold the application; there is therefore no dispute in the case over upholding these claims.

13. Article 73(1) of the Law on Public Limited Companies of the Republic of Lithuania (LPLC) provides that a company may be liquidated on the grounds for liquidating legal entities laid down in the Civil Code. The grounds for liquidating a legal entity are set out in Article 2.106 of the CC. Normally, the participants of a legal entity, the creditors’ meeting or the court, having decided to liquidate the legal entity, must appoint a liquidator (Article 2.108(1) of the CC), to whom the rights and duties of the management body of the legal entity and the competence of the legal entity’s participants to conclude transactions pass (Article 2.110(1) and (2) of the CC). When a legal entity is liquidated, the claims of its creditors are satisfied in the manner laid down in Article 2.113 of the CC. Article 73(13) of the LPLC provides that a company in liquidation must first settle with the company’s creditors, observing the order of satisfaction of creditors’ claims laid down in the CC. After settling with the creditors of the company in liquidation, accumulated dividends are paid to the owners of preference shares with a cumulative dividend. The remaining property of the company in liquidation is distributed among the shareholders in proportion to the nominal value of the shares they own. Property of the company discovered later is distributed in the same way. If legal disputes arise over payment of the company’s debts, the company’s property may not be distributed to the shareholders until the court resolves those disputes and the creditors have been settled with (Article 73(15) of the LPLC).

14. In the present case UAB - was liquidated under the simplified procedure, on the initiative of the - manager. Article 73(2) of the LPLC provides that where the decision to liquidate a company is made by the - manager, the company is liquidated applying the provisions of the CC governing liquidation of a legal entity on the initiative of the - manager. The liquidation procedure of that kind is regulated by Article 2.70 of the CC. It should be noted that the main difference between the simplified liquidation procedure and the other grounds for liquidating a legal entity laid down in Article 2.106 of the CC is that, when a legal entity is liquidated on the initiative of the - manager, no liquidator is appointed. The management bodies of a legal entity liquidated on the initiative of the - manager lose their authority from the adoption of the decision to liquidate the legal entity. In this case the - manager carries out the actions specified in Article 2.70 of the CC and in the regulations of the Register of Legal Entities that are necessary to deregister a legal entity liquidated on the initiative of the - manager (Article 2.70(8) of the CC). When a legal entity is liquidated on the initiative of the register manager, the legal entity’s property is not distributed. The question of who receives the remaining registered property after a legal entity is liquidated on the initiative of the - manager and deregistered under the simplified procedure is not separately regulated. Nor does the law provide that in such a case the right of ownership of the legal entity’s property passes automatically to the legal entity’s participants.

15. In the case law of the cassation court it has been clarified that in a case such as the present one, where the law does not provide for the transfer of a legal entity’s property to its participants after the legal entity is liquidated on the initiative of the register manager, the right of ownership of such property must be established by the court under the procedure for claims. The legal regime of the property remaining after a legal entity is liquidated on the initiative of the register manager is not obvious, because different claims may be made to the property remaining after deregistration – both by creditors and by a plurality of participants where the legal entity has more than one participant. Moreover, it has been clarified in the case law of the cassation court that it cannot be stated unequivocally that such property cannot be recognised, in accordance with the procedure laid down by law, as ownerless and transferred to the ownership of the State or a municipality (see the ruling of the Supreme Court of Lithuania of 16 October 2024 in civil case No e3K-3-185-1120/2024).

16. On 22 June 2020 a draft Temporary Law of the Republic of Lithuania on the simplified procedure for liquidating and deregistering legal entities was registered. Article 7 of that draft provided that the property of a liquidated and deregistered legal entity is taken over by the State as ownerless. However, on 23 September 2020 the Committee on Legal Affairs of the Seimas of the Republic of Lithuania submitted conclusion No 102-P-33 “On a preliminary assessment of whether draft Temporary Law of the Republic of Lithuania on the simplified procedure for liquidating and deregistering legal entities XIIIP-4014 is not in conflict with the Constitution of the Republic of Lithuania”. The conclusion states, among other things, that “<...> to the extent that the right of ownership of legal entities would be unconditionally denied solely on the basis of the circumstance that the legal entity is not carrying on activity, Article 7(1) of the proposed draft law possibly does not comply with the provisions of Article 23 of the Constitution <...>”. The legislation in question has not been adopted to date, and moreover its provisions governing the transfer of a legal entity’s property to the State possibly conflict with the Constitution of the Republic of Lithuania (see the judgment of Kaunas Regional Court of 28 November 2022 in civil case No e2-1271-921/2022).

17. Article 1.8(1) of the CC provides that civil relations not regulated by the rules of civil law are governed by civil laws regulating similar relations (analogy of law). Article 15(1)(6) of the LPLC provides that shareholders have the right to receive a part of the property of a company in liquidation. It has been clarified in case law that, in deciding who receives property after a legal entity is liquidated and deregistered under the simplified procedure, Article 15(1) of the LPLC must be applied by analogy of law (see, for example, the judgment of Kaunas Regional Court of 28 November 2022 in civil case No e2-1271-921/2022, and others).

18. The court, having regard to the circumstances established in the case discussed above and the legal regulation cited, to the case law formed by the courts on this specific question, to the fact that the claimant was the sole shareholder of UAB -, to the fact that it has not been established in the case that UAB - had creditors who could bring a claim, and to the defendant and the third parties agreeing with the claims made, finds that there is a basis to uphold the claimant’s claim in full and to recognise the shareholder’s (the shares being the claimants’ joint common property as spouses) [anonymised] right of ownership of the immovable property registered in the name of the liquidated UAB -: the land plot located at [anonymised], unique No [anonymised], the building – a grain warehouse, located at [anonymised], unique No [anonymised], and the land plot located at [anonymised], unique No [anonymised].

Claims to cancel the debt entries

19. By sale and purchase agreement No [anonymised] of 29 April 2010, UAB - acquired the land plot located at [anonymised], unique No [anonymised], from the seller [anonymised] (e-case pp. 24–28). In clause 4.5 of the agreement the parties agreed that partial or final settlement under the agreement is confirmed by a statement of the seller or his representative or by a certificate issued by a notary (e-case p. 26). In the real property register database of the State Enterprise - the fact of acquisition of the land plot located at -., unique object number -, is registered, as is the entry “Debt for acquired property”, on the basis of which the sale and purchase agreement No [anonymised] of 29 April 2010 is indicated (e-case pp. 12–13).

20. The third party [anonymised] stated in the response submitted and confirmed at the court hearing that, when the land plot located at [anonymised] was being sold, the claimant could not settle in full and a mortgage was created, and the claimant later settled in full. A statement on settlement was drawn up before notary [anonymised]; afterwards the settlement was possibly not registered. These explanations are confirmed by the evidence submitted to the case – the seller’s notarially certified statement on settlement under the agreement and the certificate on deregistration of the contractual mortgage (e-case pp. 124–125).

21. On the basis of the Act of Sale of Property at Auction of 29 December 2011, UAB - acquired a land plot with structures located at -, land plot unique object number -, and a building – a grain warehouse, unique object number -, from the cooperative “[anonymised]” (legal entity code -). In the real property register database of the State Enterprise - the fact of acquisition of the building – grain warehouse, unique object number -, is registered, as is the entry “Debt for acquired property”, on the basis of which the sale and purchase agreement No [anonymised] of 21 November 2006 is indicated (e-case pp. 14–15).

22. According to the data of the Register of Legal Entities of the State Enterprise “[anonymised]”, the State Enterprise “[anonymised]” initiated the liquidation of the cooperative “[anonymised]” (legal entity code -) under Article 2.70 of the CC. The financial statements documents for 2008 were last submitted on 10 October 2009. On 2 May 2022 the State Enterprise “[anonymised]” made a decision to initiate the liquidation of the cooperative “[anonymised]”, and on 9 May 2023 it made a decision to liquidate the legal entity. On 9 May 2023 the cooperative “[anonymised]” was deregistered from the Register of Legal Entities of the State Enterprise “[anonymised]”. Thus this legal entity does not exist, it has been liquidated, and there is no data on its successors in title. However, the entry on the debt in its favour has not been amended or cancelled.

23. At the court hearing on 20 May 2025 the claimants’ representative stated that the claimant could not join the cooperative “[anonymised]” to the case because it has been deregistered and there is no interested person left. The claimants have no possibility of obtaining documents from the notary because she no longer practises, the notary appointed in her place does not have the documents, and the claimants did not apply to the archive.

24. On the basis of the written evidence submitted to the case (e-case pp. 108–114), there is no data on debts or creditors of UAB -. In the absence of data on the successors in title of the cooperative “[anonymised]”, and of information on debts or claims made, it is concluded that UAB - has fully performed its obligations under sale and purchase agreement No [anonymised] of 29 April 2010 and sale and purchase agreement No [anonymised] of 21 November 2006, and therefore the claimants’ claims to cancel the restriction – the entry “debt for housing” (Cooperative “[anonymised]”, legal entity code -) – on the building, the grain warehouse located at [anonymised], unique No [anonymised], and to cancel the restriction – the entry “debt for housing” – on the land plot located at [anonymised], unique No [anonymised], are upheld.

Award of litigation costs

25. In the amended claim the claimants submitted a request for the litigation costs incurred, which would be submitted before the case is heard, to be awarded from the defendant. The claimants did not submit a calculation and justification of the litigation costs, and the claimants’ representative confirmed at the court hearing that the request for compensation of litigation costs is withdrawn (audio recording of the court hearing of 20 May 2025, 13 min 00 s – 13 min 35 s), and therefore the litigation costs incurred by the claimants are not awarded.

26. In the course of the court proceedings, €15.86 of costs of sending procedural documents were incurred. The court, guided by Article 93(4) of the Code of Civil Procedure of the Republic of Lithuania (hereinafter the CCP), in deciding on the reasons for which the costs of sending procedural documents arose, finds that these costs arose when the claimants joined the third party [anonymised] to the case and, taking into account that no fault of the defendant either in starting the proceedings or in its actions in the proceedings was established in the case, and that the litigation costs arose solely because of the claimants’ inaction, awards these costs from the claimants.

The court, guided by Article 259, Article 260, Article 270 and Article 279 of the Code of Civil Procedure of the Republic of Lithuania,

rules:

to uphold the claim.

To recognise that the claimants [anonymised], personal ID No [anonymised], and [anonymised], personal ID No [anonymised], have the right of ownership of the immovable property registered in the name of the liquidated UAB -, legal entity -: the land plot located at [anonymised], unique No [anonymised]; the building – grain warehouse located at [anonymised], unique No [anonymised]; the land plot located at [anonymised], unique No [anonymised].

To cancel the restriction – the entry “debt for acquired property”, Cooperative “[anonymised]”, ID No - – on the building, the grain warehouse located at [anonymised], unique No [anonymised].

To cancel the restriction – the entry “debt for acquired property” – on the land plot located at [anonymised], unique No [anonymised].

To recover from the claimants [anonymised], personal ID No [anonymised], and [anonymised], personal ID No [anonymised], €7.98 each (seven euros and 98 cents) of postal costs for the State budget. This amount must be paid to the State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania into the budget revenue collection account No [anonymised], payment code – -. The originals of the payment receipts must be delivered to the Ukmergė Chambers of Vilnius Region District Court.

The judgment may be appealed to Vilnius Regional Court within 30 (thirty) days of the date it was made, with the appeal submitted through the Ukmergė Chambers of Vilnius Region District Court.

Judge [signed with a qualified electronic signature] [anonymised]