Bondholders offer help to Popular criminal investigation

Daniel Jimenez

Founder and Head of Litigation and Arbitration Department, SLJ Abogados

LONDON, Jan 30 (IFR) – Former junior bondholders in Banco Popular, which was sold to Santander in June for €1 after their liabilities had been converted into equity, have offered to assist a criminal investigation in Spain in a bid to accelerate the proceedings. 

So far the group of bondholders, which includes Pimco, Anchorage Capital, Algebris Investments, Ronit Capital and Cairn Capital, have filed a series of civil actions in Brussels seeking to overturn decisions by the EU’s Single Resolution Board and European Commission.

The SRB recommended that the bank be put into resolution on the back of a valuation by Deloitte. This was approved by the EC too. The bondholder group has successfully brought an action to get the SRB to reveal more details of the Deloitte report, the release of which is expected imminently.

The Spanish National Court is investigating whether Popular’s board and its auditor PwC committed a crime by making false financial statements, affecting investors in the institution. Its investigation started in October. Civil actions will be delayed until the criminal proceedings are concluded, a legal expert said.

“Serious allegations have been made by complainants which the Criminal Court [part of the National Court] has agreed to investigate. The funds wish to … assist this investigation … to determine whether there was any foul play,” said Richard East, partner at law firm Quinn Emanuel, which is advising the bondholders.

Law firms Andersen Tax & Legal and SLJ Abogados are representing the bondholders as injured parties in the Spanish criminal case.

In addition to its actions in Brussels the bondholder group has also filed a claim against the Spanish bank restructuring fund FROB. (Reporting by Christopher Spink)

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