|LTL 1.9 billion recovered in two years since Snoras bankruptcy - Payments to creditors will depend on the outcome of litigation|
In the two years since
Snoras bank went bankrupt, the team led by bankruptcy administrator Neil Cooper
recovered nearly LTL 1.9 billion in bank assets and funds: several Snoras
subsidiaries were sold, a complex loan scheme was investigated and money recovered,
real estate belonging to the bank was offered for sale along with foreclosed properties,
and there has been a regular flow of loan repayments. According to the
bankruptcy administrator's latest report, LTL 136.7 million was recovered to
the bank in the third quarter of 2013. |
On 7 December 2013, it will be two years since the
institution of the bankruptcy proceedings against Snoras bank. The Vilnius
Regional Court passed an order to commence insolvency proceedings against the
bank and 7 December 2011 Neil Cooper was appointed as Snoras bankruptcy administrator.
"Two years has passed. It is a relatively short
period of time in such a large-scale and complex bankruptcy process of an
international financial group that used to be the Snoras group. The bank itself
was only the pinpoint of a structure. It was designed to collect money locally,
but many of the most valuable bank assets were in jurisdictions outside
Lithuania, including various tax havens, and we were led to these by tracing numerous
intricate payment schemes.
In this period, we sought to locate bank assets
and realise funds so that they could be returned to creditors. We discovered numerous
possible cases of fraud, theft and embezzlement that are currently being looked
into by us and law enforcement authorities in Lithuania and other countries. It
is very clear that the actions of the former bank shareholders were the main
cause behind the collapse of the bank", says Neil Cooper, Snoras bankruptcy
LTL 2.4 billion in
Until now, all claims of first ranking creditors
(Snoras staff members) have been fully met and LTL 9.3 million was paid to them
in the Snoras bankruptcy procedure. LTL 300 million was paid to the second
ranking creditor, the State company Deposit and Investment Insurance, and
further payments will be made according to the court approved schedule.
The extent of any payments to lower ranking creditors will,
however, only be known once the litigation is progressed and it is assessed
what funds are available.
"High value assets, although shown in the balance
sheet as being owned by the bank, were in fact embezzled. Therefore, claims of
lower ranking bank creditors can only begin to be settled if legal disputes are
resolved in our favour and we manage to recover these assets and funds from
former shareholders, associates and other parties", says the bank's bankruptcy
According to Neil Cooper, whilst the eventual
recoveries remain uncertain the value of filed legal claims currently stands at
around LTL 2.4 billion. The administrator's team managed to obtain a worldwide
freezing order of LTL 1.7 billion against the assets of one of the former
Snoras shareholders in support of certain legal claims.
In addition to a legal dispute against Julius Baer bank in Switzerland
for the recovery of LTL
829 million in embezzled Snoras assets, the team is also investigating
potential claims against other Swiss Banks. The bankruptcy administrator has also undertaken legal action in relation to Russian
bank Investbank and in relation to Snoras funds deposited with the Ukrainian
According to the bankruptcy
administrator, good progress has been
made in negotiations over the restructuring of a number of loans which were
ultimately provided to Latvian airline Air Baltic Corporation. Neil Cooper believes that a successful
conclusion of these negotiations will be reached soon.
also managed to unwind a loan transfer scheme involving funds registered in Cyprus,
the Cayman Islands and the British Virgin Islands and action in relation to
this has returned assets and loans with a realisable value of over LTL 180 million.
LTL 73 million has already been recovered from these funds and further recovery
procedures are underway.
Sale and recovery of
During the insolvency procedure, Snoras assets were
discovered in 19 international jurisdictions and real estate properties were
located in 7 foreign countries. The total value of owned and foreclosed real
estate in Lithuania and abroad which is currently being offered for sale by the
bank is LTL 185 million.
The process of sale of these real estate properties at different phases was
launched in summer.
During the bankruptcy administration period, the bank's
subsidiaries Snoras Media (which had a 34% interest in the Lietuvos Rytas media
group), Snoro Lizingas and the Snoras minibank network were sold to different buyers. The total value
of these deals is LTL 87 million.
Since the beginning of bankruptcy, 50 vehicles
belonging to the bank were sold, including two luxury Spyker sports cars. In
total, the sale of vehicles generated LTL 1.7 million and another LTL 1 million
was recovered from the sale of other movable property of the bank, including firearms
and collectible coins.
The team of the bankruptcy administrator continues active monitoring
of the bank's loan portfolio. Since the beginning of bankruptcy, LTL 1 billion has been received in
loan repayments and interest, including LTL 124 million in the third quarter of
In the two years since the beginning of
bankruptcy, the number of bank employees was reduced tenfold from 1,385 to 139.
Until now, 10 bank branches have operated at minimum capacity, mainly
monitoring and administering the loan portfolio.
The costs of ensuring the operation of the
insolvent bank in the third quarter of 2013, which include maintenance of the bankruptcy
administrator's team and bank specialists, units and systems, continued to fall
and totalled LTL 15.7 million (including value added tax), or LTL 5.2 million
per month on average, down by 19% compared to the average monthly costs paid in
the second quarter of the year.
Creditors from 53 different jurisdictions all
over the world have filed over 28,500 claims against the insolvent bank for the
total amount of LTL 6.7 billion.
and litigation awaits
According to Neil Cooper, his team plans to
complete the sale of Finasta banking group and negotiations with three
potential buyers are currently in progress.
An initial period of exploratory marketing has also
been commenced in relation to the sale of the Snoras loan book, and sales of
bank owned and foreclosed assets will continue. Litigation should also progress
against numerous parties.
will be an exciting time going forward as we progress some important and
sizeable asset realisations and look to further the litigation", says Neil