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Potanin Sues Prokhorov Over Office

MTPotanin is seeking $29 million from Prokhorov for not buying this building.
Vladimir Potanin has sued former business partner Mikhail Prokhorov for $29 million in a Moscow court over a property disagreement, according to court documents.

Potanin's Interros Estate sued Kraus-M, affiliated with Prokhorov's businesses, for 963.5 million rubles ($29.2 million) over an office building at 32 Ulitsa Shchepkina, the documents said. Interros' press service confirmed that the lawsuit was filed but declined to comment. A source at the holding said the dispute was over an unfulfilled contract to purchase the building.

The building, valued at $50 million at the end of 2007, was on KM Invest's balance sheets. During their asset split, Potanin and Prokhorov transferred it, along with other assets they still shared, to a 50-50 trust called Folletina Trading.

"Units of Prokhorov's business decided to buy the property, signed a purchase agreement and made an advance payment," the Interros source said. "They were supposed finish paying in December 2008, but they never transferred the money."

Kraus-M paid the advance but later decided not to buy the building and agreed with Interros on a termination of the contract, a spokesman for Prokhorov's Onexim holding company said.

Interros was not able to comment on whether there had been an agreement.

Denis Shorin, senior lawyer at Sameta, said he thought that Interros Estate could expect to receive compensation in any event. If the agreement was not canceled, the seller may demand full compliance; if it was dissolved, the seller would get compensation for damages.

The building on Ulitsa Shchepkina is just one of the many disagreements between the former partners, who have been trying to divide the assets held by Folletina Trading for half a year. Interros says Prokhorov owes the trust $640 million. Onexim claims the trust's value is lower than it should be, saying its assets should be worth more than $2 billion instead of the current $530 million.

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