Banks, Financial Services, Funds, Legislation, Lithuania

These funds are available to be paid out to Snoras creditors, says the Annual Report of bankruptcy administrator Neil Cooper for the period to 30 June 2013.

The bankruptcy administrator successfully sold the network of Snoras minibanks, which realised LTL 3.1 million (EUR 897,800). Since the period end, a sale of the bank's subsidiary Snoro Lizingas and its loan portfolio completed, realising LTL 74 million (EUR 21 million). An agreement has also been reached for the sale of Snoras Media shares and the deal will be completed once certain conditions have been met, including securing the approval of the Competition Council.

Following the approval of the Creditors' Committee, the process of selling real estate previously owned by the bank and foreclosed, which is valued at LTL 185 million (EUR 54 million), began and negotiations are continuing with potential buyers of Finasta bank.

The Bankruptcy Administrator, Neil Cooper, commented that "I believe that we have made excellent progress in the Bankruptcy during this period. Considering the complexity of the situation, the international spread of assets and the extensive network of transactions put in place by the former shareholders to divert funds from the Bank, we have recovered a substantial amount of funds for creditors. I also remain confident that our continued efforts will result in further significant recoveries in the future."

According to Cooper, current outstanding legal claims of LTL 2.4 billion (EUR 0.7 billion) are being pursued in order to seek to recover funds and assets of the bank from its former shareholders and related persons and funds. These recovery actions remain supported by a worldwide freezing order to a value of LTL 1.7 billion (EUR 0.5 billion), which was previously secured by the Bankruptcy Administrator against the assets of one of the former Snoras shareholders.

The Administrator's team also managed to investigate and unravel a structure of asset transfers in which loans with a realisable value of LTL 180 million (EUR 52 million) were transferred to funds registered in the Cayman and British Virgin Islands. By the middle of the year, the loans had been transferred back to Snoras and LTL 73 million (EUR 21 million) had been recovered for Snoras creditors; and further funds continue to be recovered by the Bankruptcy Administrator.

The proceedings against Julius Baer bank continue in Switzerland to seek to recover LTL 829 million (EUR 240 million) of misappropriated assets from Snoras.

The Bankruptcy Administrator's team has continued active monitoring of the bank's loan portfolio. Since the start of bankruptcy, LTL 876 million (EUR 254 million) in outstanding loans and interest has been repaid, including LTL 371.8 million (EUR 108 million) in the period concerned.

In total, creditors have filed over 28,500 claims against the bankrupt bank and as at 30 June 2013 the court had approved 17,167 of them. The total amount of funds claimed is LTL 6.7 billion (EUR 1.9 billion). By the end of the first half of this year, first-rank creditors (employees of the Bank) have been paid LTL 9.3 million (EUR 27 million). Funds are available for payments to second-rank creditors but payments can only start after completion of legal proceedings instigated by certain creditors contesting the ranking of creditor claims.

Since the declaration of bankruptcy, the Administrator has continued to reduce the number of bank staff from 1,385 to 139 in several phases. All non-essential services have been reviewed in order to minimise the winding-up costs.

The total costs of running the bankrupt bank made up LTL 35.05 million (EUR 10 million) in the period concerned. These costs reduced by over 40% in the period from LTL 10.95 million (EUR 3.2 million) between July and September 2012 to LTL 6.41 million (EUR 1.9 million) in the second quarter of this year. Total annual costs, including all operational and professional costs, stood at approximately LTL 124 million (EUR 36 million).