Despite the fact that Armavia Airlines was declared bankrupt by the court, the company was registered as Armenia’s 11th largest taxpayer last year.

The company, owned by Mikhail Baghdasarov, paid 7.2 billion AMD (US$15,102,000).

The bankruptcy ruling was initiated by one of Armavia’s shareholders, a company called Mika Limited, which, not surprisingly, is also owned by Baghdasarov.

Mika Limited is not registered in Armenia but in the Jersey Islands; an offshore zone. Nevertheless, datalex.am lists the company’s offices at an address in Yerevan (5 Belyakov Street) where two other companies are located – Mika Corporation and Aviafin.

Mika Ltd. went to court in September 2014, arguing that Armavia owed it $38,378,000 and that the deadline for payment was April 30, 2014. Armavia did not dispute the debt.

The court declared Armavia bankrupt on October 6 and appointed a bankruptcy administrator for the airline. Other creditors appeared on the scene and the company’s assets were seized.

Preliminary data show a total of 153 creditors waiting in line to be paid. The bankruptcy administrator drafted an eight stage list for compensation. Those first in line include Unibank ($6.666 million), Armenian Development Bank (680.285 million AMD), AmeriaBank ($1.250 million), and Armenian Business Bank ($10.427 million and 17,835 Euros).

Other creditors waiting to be paid include K-Telecom, Karkomavto, Hayaeronavigatsia, Armenia’s Ministry of Finance and the Electric Network of Armenia.

Mika Limited, the company that filed the bankruptcy case in the first place, is at the bottom of the pile; in the eighth stage.

Mika Corporation, another company founded by Baghdasarov, is in the seventh round of creditors to be paid.  It is also in debt – more than $28 million AMD and $792,014.

When one company owned by Baghdasarov took another to court to be declared bankrupt, the press in Armenia described it as a move to transfer money from one pocket to another and that Baghdasarov was taking his business out of Armenia.

But, if Mika Limited remains in the 8th round of creditors to be paid, it is difficult to see how Armavia’s assets will be sufficient to pay the money owed it. 152 creditors are ahead of Mika Ltd. in the waiting line.

In other words, Baghdasarov’s financial gambit is doomed to fail.

P.S. Hetq will write about the history of Armavia and its unfortunate demise in upcoming issues.