TALLINN — The former CEO of Arco Vara’s Latvian branch filed a bankruptcy claim for his employer on Jan. 21 after demanding 38 million krooni (€2.4 million).

The filing brings into question: is the biggest real estate companies in the Baltics is bankrupt, or merely in a nasty pay dispute?

Former CEO Indrek Porila filed bankruptcy claim against Arco Vara Jan. 21 at Harju County Court, claiming that the company owes him 38 million krooni for his work on different projects and cannot pay due to insolvency. However, just a day later on Jan. 22 Arco Vara’s partner company Toletum and HM Investments OÜ filed a claim against Indrek Porila demanding 600,000 krooni (€38,346) in unknown reasons.

Porila’s attorney Aivar Pilv told the Postimees daily newspaper that Porila has been demanding the money for several years and has reluctantly turned to the courts to redeem the missing payment.

Arco Vara, whose deficit by the end of third quarter in 2009 was 230 million krooni (€14.7 million), calls the bankruptcy filing a malicious act done to damage the company’s reputation and influence its stock price.

“To my knowledge Arco Vara AS has no debts, unpaid bills, outstanding liabilities, or any other solvency problems. Arco Vara AS is liquid and solvent company which excludes any bankruptcy proceedings or their commencement according to the Bankruptcy Act,” Lembit Tampere, a member of Arco Vara’s management board said in a statement on the company’s website.

Arco Vara was founded in 1992 by Arti Arakas and is one of the largest real estate companies in the Baltic states.