How Croatian agriculture bought the farm

The workers doubted if they would see their money again. They also feared losing what little was left of their share.

They made a fresh appeal for Babic to be relieved of his duties. In early 2000, a higher commercial court in Zagreb responded to their complaints. The judgement was scathing about the insolvency manager, as well as the court officials working with him, accusing them of “numerous omissions.”

Essential paperwork regarding the farm’s assets was “unclear,” and the manager’s reports were “incorrect,” according to the Zagreb court. Invoices did not show how much money had been paid for equipment, or what had happened to the listed price.

The judgement said the value of equipment for sale had not been assessed properly. Prices should not have fallen below half the real value “unless there were several unsuccessful auctions.” The basis for the decision to deposit funds with Glumina Bank was criticized as unclear. Babic’s report that the money was “blocked” after the bank’s collapse was also questioned.

The court concluded that Babic should have been relieved of his duties at the very outset. “It is clear that the insolvency manager either does not want to, or cannot, do his job,” the judgement said. It described Babic’s absence from key insolvency sessions as “unthinkable.”

A new insolvency manager, Tominac, took over from Babic. He confirmed the Zagreb court’s ruling, complaining that his predecessor had left an incomplete paper trail. Struggling to wrap up the bankruptcy, Tominac told the hearing that Babic and his accountant had informed him that “a lot of the documentation has ‘disappeared.’”

In 2002, the insolvency process entered its seventh year. The spiraling legal costs were eating into the remainder of the money owed to the employees.

In June, the workers announced they had contacted the police to file criminal charges against Babic, hoping to punish him for the “omissions’’ cited in the Zagreb ruling. However, the investigation was later dropped on the basis – according to Babic – of evidence he had submitted. The police have confirmed this.

Back in 1999, the workers had also brought criminal charges against the former managers whom they claimed had stolen from the farm. A further charge of theft was brought against Mr. Loncaric, the security guard hired by Babic after the bankruptcy.

Markovic died later that year, and the case against him was abandoned. Of the other cases, only three made it to the courts. In 2002, charges against one of the managers, Kresimir Roncevic, were dropped. Another manager, Ivan Zgela, confessed to stealing a sprinkler and received a suspended six-month jail sentence. His lawyers nonetheless instructed him to appeal, and the conviction was overturned in 2004.

Only Loncaric, the security guard hired by Babic who had been accused of selling off machinery illegally, faced any sanction. However, on account of the value of the equipment in question, he only received a suspended six-month jail term for forging auction sales receipts.

‘Perpetual debt’

The insolvency process was finally concluded in 2004. It had cost €35,000 – a sum that was deducted from the pot of the money out of which the workers expected to be paid. The possible payout had already been reduced by €150,000, which had been lost in the collapse of Glumina Bank. Further deductions were made to repay creditors.

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