98% of All Creditors’ Claims already Lodged

Riga, Latvia, September 28, 2018, 09:17 / Banking

There were almost 3,300 creditors who responded to the call of liquidators of ABLV Bank, AS in liquidation to lodge their claims by 18 September 2018, which makes the claims amount to slightly more than EUR 2 billion, which is 98% of the bank’s liabilities.

Credit Institutions Law of Latvia does not provide a deadline for accepting creditors’ claims, so the creditors who failed to lodge their claims by 18 September 2018 can do it later, as well, yet in this case they will qualify for another (subsequent) group of disbursements of claims, as it is provided by the law.

“Liquidation Committee appreciated the achieved numbers. Despite the relatively short term given for lodging the claims, there was virtually the highest possible volume of claims accepted. This was achieved through precise and efficient organisation of operation. The next stage is going to be no less challenging, since it implies scrupulous and responsible compliance evaluation of all claims”, says Arvīds Kostomārovs, the liquidator of ABLV Bank, AS in liquidation.

After the methodology of evaluation of creditors is approved, it is going to take at least three months to verify compliance of the creditors’ claims and compile lists of creditors. So the disbursements to the creditors who at the moment of commencement of the liquidation had balances exceeding state guaranteed compensations could probably start in January 2019. First of all, the disbursements will be made to individuals, micro, small and medium-sized enterprises in accordance with the provisions of Law on Recovery and Resolution of Credit Institutions and Investment Brokerage Firms.

Recognition and satisfaction of the creditors’ claims shall be carried out under strict supervision of the Financial and Capital Market Commission (FCMC). The international audit company EY (previously known as Ernst&Young) that has been engaged in the liquidation process has already developed a methodology on AML/CTF and sanctions compliance, audit of creditors and supervision of disbursements. The draft methodology is currently being coordinated with the FCMC.

Since 12 June 2018, the day of approval of the voluntary liquidation of the bank, the Liquidation Committee of ABLV Bank, AS in liquidation has also been dealing with recovery of assets: evaluating all of the bank’s investments, including the ones in securities and subsidiaries, analysing currency risks of the assets, as well as it started cooperation with advisors to study the options of asset sale. Since the approval of the liquidation there are in total already EUR 80 million recovered.

The main goal of the Liquidation Committee of ABLV Bank, AS in liquidation is to carry out liquidation of the bank professionally, thus contributing to the recovery of the reputation of Latvian financial sector.