On JSC “Latvijas Krājbanka’s” insolvency process

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Riga 28.11.2011
Press Release

On JSC “Latvijas Krājbanka’s” insolvency process
Financial and Capital Market Commission (hereinafter – the Commission) is planning to file for JSC “Latvijas Krājbanka’s” (hereinafter – the Bank) insolvency this week. The Commission is currently evaluating applicants for the Bank’s insolvency administrator, initilally selected by the board of Latvian Association of Certified Administrators of Insolvency Process, where experience of an applicant in credit institution insolvency processes is regarded as a key criterion.

Taking into account that currently processing of payment orders has been carried out manually and because of limited human resources, until filing for “Latvijas Krājbanka’s” insolvency, employees of the Bank and Commission have been mobilized for preparing the procedure for guaranteed compensation reimbursement via AS “Citadele”, which is scheduled to start on 29 November. Also, execution of payment orders with the value date 17 November is still going on in the Bank. In accordance with provisions of the Civil Procedure Law, following initiating an insolvency procedure the Bank’s property, including funds, have been attached. Thus execution of payment orders with the set value date, including 17.11.2011, would be impossible to carry out.

At the moment the work is continued in the Bank regarding the transfer of funds of the State-funded pension scheme and private pension plans to the new custodian bank.

The Commission informs that upon the court’s decision on the insolvency of credit institution an insolvency administrator will be appointed in the Bank. Information regarding the property of credit institution will be compiled and actions taken to meet creditors’ claims. Please note that in case of credit institution’s insolvency, first of all the deposits (natural and legal persons) up to 100 000 euro equivalent in lats 70 280.40 lats must be reimbursed. The state-guaranteed reimbursement concerns all types of funds – deposits, disbursement accounts, salary accounts, savings. The clients are entitled to receive the guaranteed compensation over the upcoming 60 years or even up to the year 2071. “Citadele banka” will provide pay-out of the State-guaranteed reimbursement.

After complete reimbursement of guaranteed compensations to private individuals and legal entities, the Deposit Guarantee Fund (DGF) is the next claimant to receive the funds from selling the Bank’s assets until the entire sum paid out from the DGF is recovered. The further procedure for satisfying the claims will be as follows: claims of the Bank’s employees, tax payments, outstanding payments to the local and state budgets, State claims regarding repayment of State-guaranteed credits, legal claims of other creditors (including deposits over 100 00 euro), interest payments to the creditors, creditor claims submitted after the set deadline, subordinated loans and finally shareholders’ claims.

Information provided by:
Anna Dravniece
Head of the FCMC Office

For additional information:
Ieva Upleja
Chief Public Relations Specialist
FCMC Office
Phone: +371 67774807, email: ieva.upleja@fktk.lv


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