Warsaw lawyer rises to challenge of how to make Russia pay
Michael Cheroutes has been shuttling between Warsaw, Moscow and London for much of the past 16 months. Not for pleasure but for pay and the legal challenge of working out ways for a Russian "oligarch" to make good on debts to its foreign creditors after the1998 financial crisis.
Cheroutes has been managing partner of Hogan & Hartson's Warsaw office, following in the footsteps of Stephen Ballou and Joseph Bell (who has started commuting to Warsaw again as a board member of the new Poland-based foundation created with the profit from the Polish-American Enterprise Fund).
He was a bit vague, probably deliberately so, on exactly how Vladimir Potanin became Hogan & Hartson's client. The firm's Moscow chief, Todd Schafer, had a hand in that. But Cheroutes became a key part of the legal brain trust that helped work out the agreement in principle late last year.
Potanin, a former Russian finance minister and one of the half dozen "oligarchs" known to control billions in Russian assets, has been head honcho of Uneximbank. The Russian sovereign default and collapse of the ruble in August 1998 destroyed the bank's $1 billion capital base and incurred losses well beyond that.
A final decision on the bank's fate will come in mid-February but after the draft agreement with creditors, its banking license was restored and bankruptcy proceedings were lifted. A newly created Rosbank, with links to Uneximbank owners, is likely to take over assets and to assume negotiated payback burdens to creditors. Those include Merrill Lynch, Citibank, the European Bank for Reconstruction and Development (EBRD) and four or five dozen lesser lights.
Merrill Lynch had managed the $300 million Eurobond sale for Uneximbank in the fall of 1997.
"We've been working on this since a year ago last September," Cheroutes said. "A creditors committee was set up at the end of 1998." It took another year to get the agreement in principle, after a due-diligence report by KPMG Polska.
Cheroutes said this had been one of the most complex legal deals he had encountered. "The interesting thing has been the interplay of the financial and legal aspects as well as the economics and politics of Russia today."
And, he notes it has been clear from the start that "this bank wants to continue to be a player in Russia and has gone to extraordinary lengths to maintain a reputation and a credibility within the international community. Zdzislaw Wieckowski of H&H's Warsaw office also has worked on the case, here and in Moscow.
Cheroutes never met Potanin himself. Maybe later especially if the deal helps not just Potanin but Russia itself do damage control and get the financial and international commercial gears in motion again.
There is a tendency for Poles to disparage the new non-governmental activist groups as too small and impotent to make a difference, especially when problems are so huge in the environment, in health care, etc.
That's true in the opinion about women's rights groups: too few activists, too many turf battles among them, too little organizing effort beyond the insiders' networks in Warsaw and Krakow.
But in reality the women's rights groups, flawed as they may be, are seen as pacesetters for much of the rest of Central Europe and countries to the east. That is shown, in part, by the international money funneled here, from the Ford Foundation funding for OSKa, the National Women's Information Center, headed by Barbara Limanowska, to the German Marshall Foundation's grants to the Women's Legal Rights Center, headed by Urszula Nowakowska.
Now, the international women's advocacy group, the Network of East-West Women, has founded an NEWW-Polska branch, the first in this region, which will be headed by Malgorzata Tarasiewicz of Sopot. Its issues will include unemployment of women, especially in rural areas, and health care and will be regional, beyond Poland itself. Its first meetings were in Krakow and Gdansk. OSKa (one of the groups visited by the U.S.'s Hillary Rodham Clinton during her trip last fall) will provide space for the NEWW-Polska office in Warsaw.
The international NEWW also sponsored a competition for a legal fellowship for a newly minted female attorney interested in a career in women's rights advocacy in Poland. Financing for the four-month intensive U.S. training plus the one-year follow-up training program in Poland came from the Open Society Institute, the Ford Foundation and the Jurzykowski Foundation.
Erin Barclay, the Washington-based coordinator of NEWW, said Poland had "more infrastructure" and a more developed base of women's rights groups than in the other front-tier transition countries. "They've done a better job they've been at it longer," she said.
"In Poland, the women's rights activists I see are more accepted by their peers and families," she said. Talk of "feminism" may still "bring a scowl in Poland but you don't get kicked out of your family." Even with Radio Maryja on the lookout to lambaste them.
That's not the case in many other countries once part of the Soviet Union. She said she was told recently by a Belarussian woman's rights activist near Minsk that "if my father or my boss knew what I was doing, I'd be kicked out of the house, I'd lose my job."
