Bankruptcy administrators of CorpBank return BGN 1.5bn to creditors

Nearly BGN 1.5bn has been retrieved by Kristi Marinova and Angel Donov – the bankruptcy administrators of CorpBank. The process of returning money to people and companies in line for it is done through so-called partial accounts for distribution. Some BGN 570m was paid out through the first such account in May 2019. The administrators note that as a result thousands of depositors have gotten some of their CorpBank money back.

According to official data, the Bulgarian Deposit Insurance Fund (DIF) holds over 70% of CorpBank’s claims. And the reason for is that the fund replaced as creditor the depositors whose guaranteed deposits in the failed bank it restored in December 2014. And so, of the BGN 570m available in the first partial account, about 30% went to creditors different from DIF.

On 8 September of this year the administrators started paying out sums from the second partial account for distributing cash from collected CorpBank claims. A total of BGN 430m will be distributed through branches of UniCredit Bulbank, transaction fees will apply. It is important to note that there is a term of five years for the money to be claimed. If the money is not claimed before that period expires, it will be retained by the bank.

The second partial account has been disclosed in the Commercial Register under CorpBank’s registration with a Unified Identification Code 831184677. Access to it is open – no e-signature or another type of certificate is required. Creditors can access the system and check if their particular claim is among the one listed to be satisfied through the account. Natural persons should be mindful that if they have gotten a new ID they will have to visit the CorpBank headquarters in Sofia and file a certified copy of an ID and a request for their personal data to be updated. The request can also be submitted via mail.

The money can be collected by an authorised person, but the power of attorney has to be verified by a notary. If you are on the list of approved claims in the Commercial Register, but it turns out your name is not on the list communicated to UniCredit Bulbank, you need to lodge a written complaint with the CorpBank administrators. The same applies in the event of discrepancy in the sum to be received.

The announced list shows that the money will be divided between 7,063 companies and natural persons. The bigger claimants include entities like the Bulgarian Development Bank, Sciete Generale and the Bulgarian Telecommunications Company (BTK) as well as public bodies such as the former Agency for Privatisation. The largest chunk of money will go to DIF – BGN 320.4m The Terem defence plant is eligible to receive BGN 860,024, NURTS – over BGN 4m. Sofia Airport, which has since been granted on concession, is eligible for BGN 161,720.

Money intended to satisfy the claims of those who are challenging the amounts is set aside in the partial account. Following a final court decision deeming the creditor’s challenge well-founded, the sum set aside will be transferred. The Commercial Register shows that the sums set aside for such cases amount to a total of a little over BGN 12.56m in the second partial account. More than half of this money is being challenged by Dunarit – almost BGN 7.9m. It is noted that this claim was acquired by the defence plant through a cession.

BTK is challenging over BGN 4.5m. Among those arguing the amount owed to them by CorpBank are some prominent figures like Evgeniy Bakardzhiev, a former vice-PM in Ivan Kostov’s cabinet. The administrators have set aside BGN 24,688 for Bakardzhiev in the second partial account, awaiting the outcome of the ongoing lawsuit. Another familiar name is that of businessman Dilyan Doron, who is in line for BGN 24,570. He was once accused of syphoning off BGN 57m from the defence plant INKO in 1993. Doron spent over four years in jail for that charge as well as illegal efforts to secretly privatise Bank Biochim. In 1999 he was acquitted.

The latest announcement by the CorpBank administrators reveals that more assets will be liquidated and distributed through a third and a fourth partial account. Not until this process is completed, will we have an idea of how much of CorpBank’s money the administrators were able to return to the insolvency estate.

According to the administrators, there are over 1,100 ongoing lawsuits at different stages of litigation. Some of them are against debtors who are in arrears and involve foreclosures. The administrators are also in court seeking rescissory action to gain control of assets acquired with CorpBank money; assets pledged as collateral in favour of the bank are being auctioned. The latest relatively big deal was for the sale of 25,723 bonds, each of them carrying par value of €1,000, issued by NURTS Bulgaria. That means financial assets for over BGN 50m are being sold. The administrators are waging court battles for a combined estimated value of over BGN 1.8bn. The last major successful lawsuit was heard in three countries against companies Tsvetan Vassilev had used to buy BTK. The case helped restore €125m of the CorpBank money used to acquire the telecommunications operator.

At the end of August, the Commercial Register published the third partial account. It has been prepared by the administrators and can be accessed by the bank creditors under CorpBank’s registration in the Commercial Register. Actually, this account has practically been set up solely for the purpose of paying over BGN 5.5m to Societe Generale. Together with the over BGN 1bn that the administrators have paid out in court-confirmed claims and restored guaranteed CorpBank deposits, the total amount of money paid is over BGN 4.6bn. Over 250,000 people along with 6,000 companies and other legal persons have received sums to address deposits of up to BGN 196,000. The payments started on 4 December 2014 via nine credit institutions selected by DIF. The programme ended on 4 December 2019. According to the administrators’ numbers, 114,000 accounts held amounts of under BGN 10, with those deposits having a combined value of BGN 580,000.

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