Monday, December 19, 2016

Diogo Lacerda says that the victims refused to give up, of eur 199 million – the Journal News

the mediator of The Government in the solution for the trader of the BES said on Monday, in Lisbon, at the public presentation of the solution to the problem of the creditors of the bank, that the victims agreed to give up to 199 million euros to shorten the solution.

“This is a unique result. The injured have to give up a large part of that claim. The credits amount to eur 485 million euros [including interest] and are willing to receive 286 million euros,” said the lawyer Diogo Lacerda Machado, introducing the mechanism which will allow to mitigate the losses of about four thousand customers to the BES that bought commercial paper of Espírito Santo Group (GES), which was bankrupt and whose refund never received.

Lacerda Machado considered that it was thanks to these clients understand the “uniqueness of circumstances” that it was possible to reach a solution of consensus. In the presentation the public was not entitled to journalists ‘ questions were not presented to the press the details of the solution in question.

According to the lawyer, who worked as a mediator with the Government in the group that has worked since march on a solution and that today was presented as the spokesman of the working group, in this process, “there were no parts and counterparts”, but a “notabilíssimo spirit of dialogue” and “genuine spirit of collaboration around the table”, whereas, only so it was possible to reach a “balanced solution and feasible”.

Lacerda Machado also said that with this solution, was given to comply with the who were the conclusions of the parliamentary commission of inquiry to the BES, to find answers to customers effectively been harmed and in distress.

The attorney said he still will take “a couple of months” to the mechanism designed to be “properly implemented”, and each client whether or not to accept this solution.

according To sources involved in the negotiations, customers who accept the solution they have guaranteed that they will receive 75% of the amount invested, to a maximum of 250 thousand euros, in applications up to 500 thousand euros, and 50% for the applications above 500 thousand, value that will be paid until 2019.

The value will be refunded by application and not by the client (there are apps that have more than one holder).

For example, for an application of 400 thousand euros will be paid 250 thousand euros, because it is the maximum possible value for that amount, even if it is below 75%. For an application of 600 thousand will be paid 300 thousand euros.

that is, guaranteed, the clients assume always losses, but receive already the money that would have to probably wait years for it to recover in proceedings in the court and so uncertain.

The first tranche should be paid as soon at the time of membership agreement, which each client must sign, and that will be equivalent to approximately 30% of the amount that each victim has the right, having been this percentage calculated based on that the consultant Deloitte considered that was the value that the unsecured creditors would receive if the BES had been paid on 03 August 2014, instead of having followed the path of the resolution, as it happened.

The value will be paid for a vehicle that will still be created – a fund of compensation, but since this will be born without money, the intention is that it be managed to the required value through a loan with the banks, with State guarantee and counter-guarantee of the Resolution Fund banking, so that it is doubtful about the impact this solution will have on the budget deficit for next year.

The loan will be request to the banks depends on the adherence of clients injured in this solution was estimated that if all join, will be needed 286 million euros.

As for the clients who wish to adhere to this mechanism, they have to fulfill a series of obligations.

In the first place, they must assign the rights in judicial cases that are already placed in the court, against the entities and the administrators linked to the GES, the vehicle that will be created. This vehicle will take, then, the litigation of these cases in court and receive any compensation awarded by the courts.

The goal is for this fund to be able to recover in court in the next few years at least the amount paid to the customers harmed.

customers have yet to commit to renounce claims and legal proceedings against a number of entities, which for now are the Banco de Portugal, comissão do mercado de Valores Mobiliários (CMVM), Resolution Fund banking, the State, the New Bank and your future buyer. But the list is still in the process of revision.

This compensation mechanism has been discussed since march between the working group set up by the Association of Outraged and Deceived of the Commercial Paper, the Bank of Portugal, CMVM and ‘bank evil’ BES, with the mediation of the Government, through the attorney Diogo Lacerda Machado.

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