2013-01-22 11:18

Lithuanian constitutional court may rule on Snoras creditors' ranking this year

The Lithuanian Constitutional Court is expected to rule by the end of this year on whether the state-owned company Indėlių ir Investicijų Draudimas (Deposit and Investment Insurance) or the so-called tier four creditors are higher in the ranking of Snoras' creditors. In case the decision is favorable to the latter creditor, they would recover around 1.5 billion litas (EUR 435m), part of which would immediately go to non-EU registered creditors, the Eversus.lt news portal reports.
„Snoras“
„Snoras“ / Irmanto Gelūno / BNS nuotr.
Temos: 1 „Editors“

The Constitutional Court is preparing the case for hearing but is yet to set a date. It was thought earlier that this matter would not get moving until 2014 at the earliest. Some signals in the market now show that this could happen by the end of this year, according to Eversus.lt.

"If the Constitutional Court decided that the existing provisions of the Law on Banks go against the Constitution and the law were changed, then all tier four creditors could expect to recover around 1.54 billion litas," said Dovilė Burgienė, a partner with the law firm LAWIN.

She said that Snoras' tier four creditors include companies registered both in Lithuania and outside the country, as well as private individuals. Snoras informed the website that 428 creditors on the list are registered outside the EU and represent "the overwhelming majority by the number of creditors' claims."

The lawyer estimates that if the claims by Indelių ir Investicijų Draudimas
and those of tier four creditors were satisfied proportionately, they could all expect to receive 0.615 litas (EUR 0.178) for every litas claimed.

Claims made by Indėlių ir Investicijų Draudimas total 4 billion litas, which amounts to the value of Snoras' assets given in the bankrupt bank's report for the third quarter of 2012. Tier four creditors' claims total around 2.5 billion litas.

The Lithuanian government nationalized Snoras in November 2011. A court opened bankruptcy proceedings against the bank in December. The bank is currently in the process of liquidation. Its bankruptcy administrator, Neil Cooper, is now trying to sell its assets.

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