Largest BPP private creditor calls for new Creditors’ Committee

  • Lusa
  • 6 June 2022

The formal request to replace the current Creditors' Commission team with another team was delivered on May 24 at Lisbon's Commerce Court.

Bank BPP’s largest private creditor, Liminorke, has asked the court to dismiss the current Creditors’ Committee, accusing the team of inertia and failure to meet its obligations, according to the request to which Lusa had access.

The formal request to replace the current Creditors’ Commission team with another team was delivered on May 24 at Lisbon’s Commerce Court.

According to the company, “the common creditors do not have any information about the activity of the Creditors’ Commission nor do they have conditions to know or influence its deliberations and meetings since the assembly has not been convened for years”.

Liminorke considered that this “procedural inertia” demonstrates that the “creditors’ representatives have not properly fulfilled the main function of the commission: to oversee the work of the Winding-up Commission (…), which cannot be admitted”.

In the document, Liminorke says it has a recognised credit of over €53 million (relating to a deposit in BPP), to which it adds more than €1 million in accrued interest.

Limonorke even considered that the inertia of the Creditors’ Committee might be due to it having “a lack of interest and lack of representativeness” since it is chaired by the representative of the Portuguese state (the Director-General of Treasury and Finance) and the latter has already recovered most of the money. The state has already recovered €406 million of its guarantee of €450 million provided in 2008.

“In addition to the fact that the state has already recovered almost all of its claim, it is known that other members of the committee, Hélder Madeira and Maria Antonieta [representatives of creditors], have also received a good part of their claims, as informed by the Investor Compensation System (IIS),” Liminorke said.

Liminorke said it is currently the largest creditor of the Banco Privado Português (BPP) insolvent estate, taking into account that the state has “only around €43 million left to receive”, and therefore also considers that it should be part of the Creditors’ Commission “to put an end to its negligent and complacent behaviour”.

Also, in the application to the court, Liminorke accuses the BPP Winding-Up Committee of the bank’s liquidation dragging on for years, considering that the “delays have been caused by the sluggish conduct of the BPP Winding-Up Committee, which repeatedly fails to meet its obligations”.

Last January, an association of clients harmed by BPP asked the court to dismiss the BPP Winding-Up Committee, accusing it of dragging out the bank’s liquidation process for more than 11 years.

In reaction, the Winding-Up Commission said that the Private Clients association “does not have legitimacy” to ask for the dismissal, as “the legal requirements for the process have not been verified”. The court has not decided on the request.

The association of clients injured by the BPP has been very critical of the actions of the Winding-up Commission and argues that there are already payments to creditors, even if partial.

In September 2021, after a demonstration of BPP victims in Lisbon, the Winding-up Commission made an announcement in the Expresso newspaper saying that 6,000 creditors are owed almost €1.6 billion, of which €450 million are guaranteed credits (from the state), €950 million of common credits and €200 million of subordinated credits.

At the time of the bank’s liquidation, its net assets were worth €700 million, meaning BPP had a negative net worth of €900 million, “which immediately resulted in the impossibility of satisfaction of all recognised common credits,” the Winding-up Commission warned.

João Rendeiro created Liminorke as an investment vehicle of the BPP group in the energy area, consisting of 250 shareholders. In 2008, it sold a qualified stake in Galp, and the money was placed on deposit with BPP. With the collapse of the bank, Liminorke’s shareholders were damaged. Jaime Antunes is the current president of Liminorke and president of the association of aggrieved people, Privado Clientes.

The collapse of BPP, a wealth management bank, began with the 2008 financial crisis and culminated in 2010. Despite being a small bank, the collapse of BPP injured thousands of clients and the state and had significant repercussions due to potential contagion effects to the rest of the system during a financial crisis.

The founder and former chairman of BPP, João Rendeiro, and other former directors of BPP were charged with economic and financial crimes between 2003 and 2008 after they improperly gave out bonuses and appropriated money from the bank.

Rendeiro died on May 12 in prison in South Africa, where he had been since December 11, 2021, after three months of evading Portuguese justice to avoid serving time in Portugal.