The Bank of Portugal (BoP) considers that the legal dispute that is fighting with Goldman Sachs because of a financing of over 700 million euros granted to BES can harm the sale of the New Bank.
“This disturbance at a crucial time for taking final offers from potential buyers, not only would create uncertainty about the balance of the New configuration database, but also would subject the buyer to future significant litigation risks,” said the Bank of Portugal, in a document delivered in court and that Bloomberg had access.
According to the agency financial information, Goldman Sachs filed a lawsuit before a Portuguese court to have the status of Oak Finance (a Luxembourg company involved in this financing transaction to Banco Espírito Santo) – is suspended until there is an outcome of legal proceedings filed with the English courts by the US investment bank against bop.
At stake is a loan in the order of 706 million euros, granted by BES Finance Oak, an investment vehicle that will have been created by Goldman Sachs. This credit from BES, after at first, after the resolution of the bank last summer, have been active in the New Bank, was passed to the BES (so-called “bad bank”), by decision of the bop, making in December.
Made financing, June 30, 2014, that is, about a month before the BES collapse, Goldman Sachs sold securities of Oak Finance to several institutional investors, with the order given by Portuguese supervisor to transfer this credit “good bank” (New Bank) for the “bad bank”, are at serious risk of not being repaid.
In mid-February, Goldman Sachs publicly held that the decision not to return the the brigações of the New Oak Finance Bank based on “factual errors” and “violate state principles of law and equity, “promising” trigger all legal mechanisms. ”
In response to this complaint from US bank, announced the bop in the same time maintains the decision of 22 December not to transfer to the New Bank the responsibility of BES on the loan granted by Oak Finance Luxembourg on the ground that, by law, “claims under these conditions can not be transferred to a bridge bank”.
And the bop pointed out that “this responsibility was not transferred to the New Bank, there are serious reasons for considering that and founded the Oak Finance had acted on the loan on behalf of Goldman Sachs International, and that this entity had held a shareholding of 2% of BES capital “.
Goldman Sachs responded immediately claiming that “never stopped more than 1.6% of the voting rights relating to the shares of BES, never reaching the threshold of 2% that qualify as a shareholder of reference, to the extent that the remaining 0.6% were positions taken on behalf of customers who did not confer you any right. ”
And claimed on 26 December that “got confirmation by the Bank of Portugal that all senior debt of Banco Espírito Santo, as the Oak Finance bonds, would be transferred to the New Bank” , threatening to immediately go to court, claiming damages for investors, something that did come to pass.
The second phase of the New Bank sale process ended on April 17, having been selected by the bop five of the seven entities that were in the race to submit binding proposals purchase of the institution by the end of June.
On August 3, the Bank of Portugal took control of BES, after half-yearly losses of 3.6 billion euros, and announced the separation of the institution into two entities: the so-called bank bad (a vehicle that keeps the BES name and concentrating toxic assets and liabilities and shareholders) and the bridge bank, designated New Bank.
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