On JSC „Latvijas Krājbanka” (in liquidation) insolvency process: January 2013

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On JSC „Latvijas Krājbanka” (in liquidation) insolvency process: January 2013

The administrator „KPMG Baltics” continues carrying out the sales of „Latvijas Krājbanka” and its subsidiaries’ properties and other assets in auctions.  In January 2013, the amount of recovered assets from the auctioned real estates and other property, as well as the sold subsidiaries and recovered loans made up about ~3,1 million lats (in total as from the initiating of insolvency process ~58,85 million lats).

Until January 2013 there were more than 4 500 proceedings initiated. Moreover, the JSC „Latvijas Krājbanka” administrator is making every effort to recover more than 100 million lats, which have been seized in the foreign banks’ correspondent accounts. Depending on the certain jurisdiction, both civil and criminal cases for asset recovery have been initiated. This money has been seized in the foreign banks’ correspondent accounts because of allegedly unlawful activities of the former bank management of JSC „Latvijas Krājbanka”. In case of successful recovery of the funding, the possibility to meet the claims of current creditors considerably grows.

Besides, KPMG Baltics continues the selling of the loan portfolio, which was started back in June 2012, by carrying out various activities to attract potential investors. The credits of JSC „Latvijas Krājbanka” (in liquidation) have been broken down in five loan portfolios based on their common features (corporate loans, retail loans etc.).

The key task of „KPMG Baltics” is to regain the maximum of funding to cover the claims of all „Latvijas Krājbanka” creditors. Total claims of creditors against the JSC „Latvijas Krājbanka” (in liquidation) made up ~421 million lats in November 2012 (excluding already executed contributions to the Deposit Guarantee Fund (DGF) in the amount of 90 million lats).

Under the law the Deposit Guarantee Fund is the first claimant that has the right to receive the funding from the realization of the bank’s assets in the event of the bank’s insolvency. Further procedure whereby the creditor claims are met is as follow: employees of the bank, tax payers, outstanding payments to the State and local government budgets, claims guaranteed by the State, other lawful creditors (including depositors who had deposited more than 100 thousand euro), interest payments to creditors, creditor claims made after the application deadline, subordinated debt and finally – the shareholders.

The above insolvency and payment regulatory procedures are determined in order to ensure that the Deposit Guarantee Fund, as the State guarantee mechanism, would secure the financial stability and protection of small depositor interests, guaranteeing compensation to one depositor up to 100 thousand euro.
 

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