Bankruptcy Administrator of BAB Bankas SNORAS Comments Article
OREANDA-NEWS. August 27, 2013. On 17 August 2013 the newspaper ‘Lietuvos Rytas’ published an article ‘Tyli „Snoro” afera sprogo lyg bomba”’ accusing the bankruptcy administrator of BAB bankas SNORAS (bankrupt) of entering into a controversial transaction regarding the sale of shares of three UAB "SNORAS Investment Management" (SIM) subsidiary companies: UAB „Nekilnojamojo turto gama“, UAB „NT panorama“ and UAB „STELITA“.
The above mentioned article is misleading and offensive towards to the bankruptcy administrator, creditors of the bank and the administration team. The author of the article did not present all the background and detail of the actual transaction; instead it contained a false interpretation and incorrect financial numbers based on partial information.
The bankruptcy administrator of BAB bankas SNORAS, Neil Cooper says: ‘Inaccurate reporting by some media sources is unprofessional, biased and simply does not reflect the actual transactions which were performed over a year ago. The author of the article never contacted the bankruptcy administrator in order to clarify the facts or the basis and rationale of the transaction, which leads to the thought that the author never intended to present the transaction in an accurate and balanced manner’.
First, it is important to recognise that Snoras did not control SIM. The 51% majority shareholder in SIM was a Cayman registered fund represented by Jubilee Financial Products LLP, a company registered in London and associated with the previous majority shareholders of Snoras.
The Snoras BA, supported by independent valuations, determined that the best opportunity for Snoras creditors lays in recovering the LTL 63 million loans extended to the three subsidiary property companies. However, to realise this value, the three companies would need to be separated from SIM to permit them to raise additional financing needed to complete the developments, which Snoras in bankruptcy was not able to provide.
Against the indication (received in writing) from Jubilee that they would imminently remove the Snoras appointed directors and supervisory council members, and take management control, Snoras acted to transfer the 51% SIM shareholdings in the subsidiaries to holding companies set up by the minority shareholders; all shares of these holding companies are pledged to Snoras as security for repayment of the loans, for which accelerated repayment schedules were agreed. SIM was then placed into insolvency with enough funds to pay-off the small minority creditors, thereby facilitating a rapid liquidation of the company and forestalling any action by Jubilee to frustrate this process.
The Bank’s representative as Managing Director of SIM was Vita Andrikyte, who understandably did not wish personally to be exposed to any potential conflict with the majority shareholder of SIM and therefore elected to resign. Modestas Keliauskas remained in office as Supervisory Board chairman of SIM throughout and provided support for the bankruptcy administrator‘s actions.
SIM has now been liquidated and new investors/funding for the three subsidiaries are being actively sought.
The Bankruptcy Administrator of Snoras acted consistently in the best interests of all creditors throughout this process with the clear objective to maximise the potential recoveries from the Snoras loans to the three property companies for the benefit of Snoras creditors.