The Pulp and Paper Mill (PPM) in the city of Sovetsk, Kaliningrad Region, has been teetering on the brink of “life and death” since 2006. Since then, troubles began at the plant: several large fires, the initiation of bankruptcy and, finally, the liquidation of the enterprise. Not the last role in the fate of the plant in the field of paper production necessary for the country was played by foreign citizens.

Since December 22, 2022, JSC “Soviet Pulp and Paper Plant” is going through the stage of liquidation under the control of the bankruptcy trustee. At the top, they decided that it was not advisable to save the once successful enterprise. The ex-director of the plant, Mikhail Teitelboim, seems to have decided that it would be a sin not to take advantage of the situation. According to one version, with the help of a network of companies he created, he created a scheme to withdraw money from a bankrupt enterprise.

Cunning scheme

October 13, 2010 “Soviet TsBZ” was declared bankrupt. A receiver has been appointed. But Mikhail Teitelboim and his associates managed to transfer 88% of the plant’s staff (482 out of 549 people) to the Atlas-Market company. Further, on the basis of only one court decision on the dispute over tax charges, one can trace the whole cunning scheme of Mr. Teitelboim.

Let’s not get into the litigation. In short, it turns out that the dispute was, among other things, about the work on setting up the BDM-5 paper machine at the Soviet pulp and paper mill. The fact is that even before bankruptcy, in June 2010, PM-5 became the property of Legal Real Estate Agency LLC, often referred to by its abbreviation – YURAN. From the same judicial act, it turns out that Yuran LLC is the largest creditor of Sovetsky TsBZ OJSC – 88%. From 10/27/2010 to 05/25/2011, it and OAO Sovetsky TsBZ were participants in Atlas-Market LLC with shares of 70.37% and 29.63%, respectively.

Let’s look further. The act states that settlement operations in the St. Petersburg bank “Zenith” by the company “URAN” are carried out exclusively with Teitelboim M.N., JSC “Plant” Vympel “, in which Teitelboim M.N. is the founder and chairman of the Board of Directors, and Atlas-Market LLC. In other words, we see that both companies are controlled by Teitelboim and by bringing the production facilities and assets of the plant under the jurisdiction of Atlas-Market, Mr. Teitelboim seems to have gained control over the property of the enterprise.

In addition, the paper machine was transferred to Yuran LLC for a reason. From the same judicial act, it turns out that PM-5 was transferred to Yuran LLC to pay off the debt under the assignment agreements dated January 28, 2010 with ERGOTECH LLC, dated July 5, 2010 – with European Trading Associates SA British Virgin Islands.

Despite the introduction of a bankruptcy trustee at the Soviet TsBZ, Mikhail Teitelboim, together with his wife and sister, own a controlling stake in the plant. And YURAN is the founder of Atlas-Market LLC, from which pre-bankruptcy movements began under this scheme.

German roots

The history of the “Soviet TsBZ” began back in 1898. Then in the Prussian city of Tilsit (now Sovetsk), on the basis of 8 sawmills, the Waldhof company organized the Zellstofffabrik Waldhof-Tilsit pulp and paper enterprise. It consisted of a wood preparation plant, three pulp mills, two paper mills, a sulphite-alcohol shop, a repair unit and its own thermal power plant. The Waldhof company also owned the ZellstoffWaldhof – Mannheim plant, located in Mainheim (Germany), organized in 1884. On its basis, to this day, several divisions of SCA operate – SCA Hygiene Products and SCA FlexPack Papers.

Before the outbreak of World War II, the factory produced up to 300 tons of pulp per day and was one of the largest in Germany. During the war, fierce battles took place in this territory, and the enterprise was badly damaged. But immediately after the victory in 1945, the restoration of the enterprise from the ruins began with the reconstruction of its outdated surviving part. This is how the Tilsit Pulp and Paper Mill was revived. On October 17, 1946, the Tilsit Pulp and Paper Mill was renamed into the Soviet Pulp and Paper Mill.

Since then, the enterprise has repeatedly been reassigned to various departments, the names have changed, new production facilities have been introduced, and the number of employees has grown. By the 1990s, the enterprise approached as the “Soviet Pulp and Paper Mill”. Since 2002 – OAO Soviet Pulp and Paper Plant.

And few people know that the harbingers of the unhappy fate of the plant were the “cunning” Baltic states with the Finns (obviously, you should not remind anyone of what the paper industry means for Finland). Since the mid-90s, representatives of small, but very proud, countries began to attack the pulp and paper mills in the Kaliningrad region. There were 3 such enterprises in the region: “Soviet Pulp and Paper Plant”, Pulp and Paper Plant CJSC “Cepruss” and LLC “Nemansky Pulp and Paper Mill”.

The “northerners” pressed against the environmental damage that Russian enterprises allegedly cause to the biosphere of the Baltic Sea. So far, no one paid attention to these provocative attacks. But in the 2000s, the Ministry of Natural Resources of the Russian Federation took seriously the Kaliningrad pulp and paper mills. Oleg Mitvol, deputy head of the Federal Service for Supervision of Natural Resources, who visited the Kaliningrad region in 2006, threatened to close all three pulp and paper enterprises, arguing that it was the same alleged harm to the ecological environment of the Baltic Sea. It is not known how sincere the official was in environmental issues and in whose interests he acted, but the fact that the closure of three enterprises of the paper industry at once was very desirable for foreign competitors is indisputable.

Fires or arson?

In the 2000s, the Soviet TsBZ worked stably on the whole. The first blow to the plant was a fire in a bark warehouse in June 2008. The fire raged over an area of ​​about 3 hectares, creating heavy smoke and a threat of ignition of industrial wood and other buildings of the pulp and paper plant. Even a Ka-32 firefighting helicopter helped put out the fire. As a result, 35.5 thousand cubic meters of wood worth 75 million rubles and 2 gantry cranes worth 4 million rubles burned down.

The materials necessary for production, chemicals, and the entire timber exchange also burned down. Pulp became impossible to produce. Then they already worked on imported pulp, and this is a completely different production. Accordingly, the number of workers also decreased. The cause of the fire was never determined, although there were rumors of deliberate arson among the townspeople.

We do not affirm anything, but it was this fire that became the starting point for initiating the bankruptcy of the enterprise. And, oddly enough, they demanded to start bankrupting the plant precisely from Moscow – from the central office of Sberbank. By that time, the TsBZ owed the local branch of Sberbank 360 million rubles.

On June 13, 2019, another fire broke out at the plant. A bark dump caught fire on an area of ​​2 hectares. The fire was extinguished for 3 hours. The cause of the fire is also unknown. Since then, the plant began to sell. In the first lot in September 2019, part of the liquid property of the enterprise was bought out for 8.24 million rubles by … Atlas-Market LLC. In March 2021, the same Atlas-Market buys another part of the property of the CBR at auction for 24.8 million rubles.

At the same time, in February 2021, Mikhail Teitelboim put up part of the purchased property – the factory House of Culture – for sale for 8 million rubles. Based on the similarity of the amounts, it can be assumed that the DC is part or all of the acquired “property” on the first run in September 2019.

Citizen of the world?

According to the Telegram channel Brief, Mikhail Teitelboim has Israeli citizenship and currently lives in Britain. Which is quite possible, given its connection with the aforementioned European Trading Associates SA British Virgin Islands and ERGOTECH LLC. Is it not there that Mr. Teitelboim withdraws the funds of the bankrupt plant, which, as we can conclude, he himself “sorted out” with a cunning scheme of companies obsessed with each other and, ultimately, with Mikhail Nusenovich himself?

And the once successful Soviet Pulp and Paper Plant has been in liquidation since December 22, 2022 with debts of 160 million rubles.