Voluntary Liquidation of ABLV Bank, AS to Protect the Interests of Clients and Creditors

Riga, Latvia, March 15, 2018, 08:51 / Banking

In order to ensure the best protection of the interests of clients and creditors, at the extraordinary general shareholders’ meeting on 26 February 2018, ABLV Bank made a decision about voluntary liquidation. ABLV Bank believes that this way it will be able to ensure the best protection of its assets for settlement with all clients.

“Taking into account the insolvency and liquidation procedures that had taken place in Latvia before, we believe that this is the best option we could have made after the statement of the European Central Bank regarding commencement of winding up procedures. The financial standing of the bank is excellent, therefore we should take good care about every client and protect their rights”, says Ernests Bernis, Chairman of the Board of ABLV Bank.

On 5 March, ABLV Bank submitted a draft voluntary liquidation plan application to the Financial and Capital Market Commission. The aim of the liquidation measures is to satisfy all claims of clients and creditors in full.

A draft application was prepared by the team of liquidators elected by the meeting of shareholders of the bank. The team of liquidators currently consists of Elvijs Vēbers, sworn attorney and insolvency administrator; Andris Kovaļčuks, expert in real estate and finances; and Arvīds Kostomārovs, expert in corporate finances. The application project includes information on the fourth liquidator which the shareholders’ meeting should first approve.

It is planned that an independent international auditor will be engaged in development of assessment of quality of assets and the procedure of disbursements and the following checks under the process of voluntary liquidation.

The measures of the voluntary liquidation provide that the team of liquidators shall be supervised by a specially created advisory committee of the general meeting of the shareholders. Also, all information about the decisions made by the liquidators shall be regularly submitted to the FCMC which will continue supervision of the bank’s operation and its regulation.

Voluntary liquidation plan provides for primarily ensuring disbursements under the Guaranteed Compensation Fund. The disbursement of deposits started on 3 March devoting EUR 480 million for it. The next important part of obligations to be covered is deposits of individuals and small and medium companies.

According to the voluntary liquidation plan, the obligations to the creditors shall be covered through quarterly payments disbursing all the free funds available at the given stage of the process that are not necessary for continuing the liquidation procedures. The draft plan implies that the first disbursements for covering obligations shall start in Q4 2018.

After the end of term for creditors to apply, the liquidators will prepare a list of creditors determining the sequence of their rights for settlement in accordance with the requirements provided in Section 191 through 195 of Law on Credit Institutions based on the documents submitted by the clients. The obligations to the shareholders shall be covered last.