OREANDA-NEWS. January 25, 2012. On 7 December 2011 Vilnius Regional Court passed a ruling to initiate bankruptcy proceedings in relation to AB bank SNORAS (legal entity code 112025973, with its registered address at A. Vivulskio str. 7, 03221 Vilnius, Lithuania) (hereinafter – the Bank). The part of the ruling initiating the bankruptcy proceedings of the Bank became effective and the Bank acquired the status of a company in bankruptcy on 20 December 2011, reported the press-centre of Bank SNORAS.

Upon adoption by the Vilnius Regional Court of the above-named ruling, the decision of the Board of the Bank of Lithuania No. 03-196, of 24 November 2011, on the permanent termination of the bank licence issued to AB bank SNORAS, had come into effect.

According to Article 11 part 3 item 13 of the Enterprise Bankruptcy Law of the Republic of Lithuania, the administrator shall, no later than 30 days from the entry into force of the court ruling to initiate bankruptcy proceedings, inform the parties concerned of his intent or refusal to perform transactions entered into by the enterprise the period of performance of which has not yet expired.

Affected counterparties will have recently been informed by the bankruptcy administrator of his intention to continue to perform or terminate contracts.

FAQ
1 I saw/received a notice from Snoras talking about termination of contracts with customers and other counterparties – what does it mean?

As part of the bankruptcy process set by the law, the Bank was obliged to decide which contracts it would continue to perform and which it would terminate.

2 Does the termination of my contract change my rights?

Where a contract is terminated, the Bank is not obliged to perform its obligations which arise under that contract. However, termination of a contract does not affect your right to make claims against the Bank for non-performance of its contractual obligations.

3 What if my contract has not been terminated?

If your contract has not been terminated, it continues to be effective to and to bind both/all parties.

4 How do I make my claim?

If you wish to make a claim, you should submit the creditor claim. Furthermore, termination does not affect any rights you have as a claimant against the Deposit Insurance Fund.  Creditors cannot claim in respect of insured amounts for which they have already received compensation. 

For further detail see www.snoras.com or call  8 800 272 72 (in Lithuania) and +370 5 239 22 39 (for overseas customers).

5 Has my contract been terminated?

As a general principle your contract has been terminated if, under your contract:

you do not owe Snoras any money or have any other rights against Snoras; or

Snoras has assumed no obligations, has fully performed its obligations or has no further obligations to you.

Please see the table below for further details of contracts that have been terminated.

As a general principle your contract hasnot been terminated if, under that contract:

 you owe money to Snoras;

Snoras has other rights against you or outstanding benefits;

you have confidentiality obligations or undertakings to Snoras;

you have a correspondent bank nostro agreement with Snoras;

you have a securities account agreement with Snoras;

you have a payment account agreement with Snoras;

you have an internet banking services agreement with Snoras;

you are the lessor/sub-lessor/lender in relation a lease, sub-lease or loans of use by Snoras of land in Lithuania; and

you have an operational contract which the Bankruptcy Administrator has determined shall continue to maximise the value of the bankruptcy estate.

6 I have more than one contract with Snoras. Are they all terminated?

No. It depends on the contracts you have with Snoras. All, some or none of them may have been terminated as set out in the table above.

7 I think my contract should remain in effect (for example I provide utility services to Snoras, should they really be terminated?)

If you think that your contract should not be terminated and you have not been notified that it will continue in effect, please contact your usual contact at Snoras.

8 I do not have a contract with Snoras, why was I sent a letter?

Letters may have been sent to counterparties of Snoras whose contract has already expired.  If all of your contracts with Snoras have expired prior to the date of the submission of the notification please disregard the notification.

9 If my contract continues in effect, how do I know I will be paid?

Snoras is continuing to perform certain contracts which the Bankruptcy Administrator believes will preserve the parts of Snoras which can be sold and to maximise the value of the bankruptcy estate. If you have concerns about your contract, please get in touch with your usual contact at Snoras.

10 Why did I not receive a letter to terminate my contract?

Because under the terms of your contract and to conserve funds available to creditors claiming in the bankruptcy, a letter of termination was not required. The notice on Snoras’ website is effective.

11 Under my contract with Snoras, I have the right to borrow more funds. Can I still do so?

If no funds have been borrowed or there are no outstanding amounts owed to Snoras under the agreement, your agreement has been terminated.

For corporate customers (legal persons): if there are outstanding amounts owed by Snoras under the agreement, your agreement has been terminated. However customers will not be required to make accelerated repayment of drawn funding, provided you make repayments of interest and principal in line with the timetable originally envisaged in the agreement, unless a customer elects to prepay. Any such pre-payment may be made without penalty. Please contact your usual contact at Snoras if you wish to discuss this.

For retail customers (physical persons): with finance agreements under which there is outstanding indebtedness to Snoras including credit cards, leasing, mortgages and other consumer loans: these contracts will remain in place. However, Snoras will not be extending any  further credit under bank cards, leasing cards or instalment payment cards.

Note: the information in this Q&A document does not affect the formal notifications by Snoras on performance or non-performance of the agreements.