A British court ruled in late 2022 that a Ukrainian fruit juice magnate and his company — T.B. Fruit — stiffed Cargill for $124 million. But Cargill has yet to recover a cent.

The juice maker, Taras Barshchovskiy, has proved elusive: He claims no place of residency. And Cargill alleges that to avoid paying his debts, he fraudulently transferred corporate assets to his children in Ukraine.

"Barshchovskiy still remains fully in control of T.B. Fruit, with the assistance of his children and others as proxies," Minnetonka-based Cargill said in a court filing.

Barshchovskiy couldn't be reached for comment, and lawyers in Ukraine who have represented him in the Cargill matter did not respond to requests for comment.

However, in proceedings before an arbitration court in London, he alleged that Cargill's financial claims were part of a "fraudulent" and "illegal" scheme connected to the 2015 collapse of Delta Bank — one of Ukraine's largest bank failures.

Cargill and T.B. Fruit both had significant exposure to Delta Bank. The two worked out a complicated financial arrangement to avoid losses just before Ukrainian banking regulators took over Delta.

The London Court of International Arbitration found nothing nefarious about the arrangement, rejecting Barshchovskiy's claims. The court ruled that Barshchovskiy owed Cargill $102 million for unpaid debts, plus $22 million in interest and fees.

Another English court entered a "final and conclusive" judgment in January ordering enforcement of the earlier ruling. Ukraine's Supreme Court approved Cargill's enforcement action against Barshchovskiy a couple of months ago. Cargill is also pursuing its claims in a criminal case against Barshchovskiy in Polish courts.

And this spring, Cargill sued Barshchovskiy in New York state court, again seeking to enforce the English judgment. Barshchovskiy has assets, including juice concentrate, that are located in or pass through New York, Cargill claims.

The agribusiness giant made loans to Barshchovskiy through a subsidiary, Cargill Financial Services International. Cargill's financial businesses include extending sophisticated trade credit to exporters and banks globally, and the company has been a big player in the market for years.

The obscure business can be lucrative, but Cargill has had its share of problems in former Soviet lands. In Ukraine, there was a wave of bank failures, including Delta, in the 2010s that left Cargill scrambling to recoup credit it had extended.

A similar story played out in a deal Cargill made with a big Azerbaijan bank that filed bankruptcy in 2017. And last year, a bank largely owned by the Russian government accused Cargill and several other global trading companies of fraud and conspiracy.

The Russian state bank alleges that Cargill and others abetted fraud at a privately held Russian bank that failed at a cost of $2 billion. Cargill says the claims are preposterous.

Building the relationship

Taras Barshchovskiy founded T.B. Fruit in western Ukraine near Lviv around 2003. Today, the company has six manufacturing plants — five in Ukraine, one in Moldova — and 1,500 employees, its website says. It formerly had factories in Poland, too.

T.B. Fruit bills itself as a leading European juice concentrate manufacturer. Cargill, in court documents, says the company operates in more than a dozen countries, including exporting juice concentrate to the U.S.

Cargill launched a "finance and trade relationship" with T.B. Fruit in 2010, the company said in a court filing. It regarded T.B. Fruit as an "attractive business partner" due to its size and its business lines, which complemented Cargill's own ventures in Ukraine.

"T.B Fruit was equally eager to have a direct relationship with [Cargill] because as the largest trade finance providers in the region, [Cargill] offered the extensive financing needed for growth," the company said.

Between 2015 and 2018, Cargill loaned $102 million to T.B. Fruit, credit backed personally by Barshchovskiy. But two of T.B. Fruit's subsidiaries declared bankruptcy in Ukraine in 2019, and by early 2020. Cargill then served default notices on its T.B. Fruit loans.

The two companies tried working out a repayment agreement, but Cargill claims T.B. Fruit stopped responding to its entreaties in August 2020.

Cargill claims in court documents that Barshchovskiy in 2020 transferred the land he owned in Ukraine to his two 20-something children. A year later, he assigned his 100% interest in T.B. Fruit to his kids.

Cargill says in U.S. court documents that it believes Barshchovskiy lives in Ukraine and still runs T.B. Fruit. But in May, Barshchovskiy "executed a formal declaration" saying that he has "no place of residence" and "no place of employment," Cargill said in a court filing.

Taking dispute to court

In late 2021, Cargill took its beef to the London International Court of Arbitration, as English law governed credit agreements with Barshchovskiy.

Barshchovskiy argued to the London court that his loans from Cargill were "tainted" with illegality because of their links to agreements involving Delta Bank, according to the London arbitration tribunal's report.

Delta was Ukraine's fourth largest bank with $5 billion in assets before it collapsed in early 2015. It was Ukraine's largest bank failure at the time.

The country paid out more than $600 million to the bank's depositors, though a significant amount of deposits were not covered. Fraud allegations were levied at Delta's management.

Cargill owned about 30% of Delta Bank because of the restructuring of another Ukrainian bank that failed in 2010. Cargill's claims on that dead bank were sold to Delta and converted to equity, the arbitration report. Cargill's equity participation was passive, time-limited and effectively a form of senior debt.

Cargill has said it had no role in Delta Bank's management.

Delta Bank also owed Cargill about $105 million in trade debt — and repayment could be endangered if the bank failed. T.B Fruit, meanwhile, was a significant customer of Delta. So Cargill and T.B. Fruit worked out a deal to mutually protect themselves as news spread that Delta might tank, the court ruling said.

Essentially, Cargill assigned trade debt that Delta owed it to T.B. Fruit. The juice company thus set off its own loan obligations to Delta Bank and got other financial advantages, the court report said.

But the T.B. Fruit set-offs were later voided by Ukrainian courts. The company told the London arbitration court that the whole Delta bank agreement was an illegal scheme foisted on it by Cargill.

But the court found no evidence of illegality on Cargill's part. It also concluded that the complex Delta Bank agreement between Cargill and T.B. Fruit had no bearing on the overall financing agreements between the two parties.