OREANDA-NEWS. November 27, 2012. The Central Bank of Lithuania placed AB Bankas SNORAS under temporary administration and the bank’s operations were suspended to allow for a controlled analysis of its financial situation. During the temporary administration, the bank’s financial position was evaluated and restructuring options were provided to the Central Bank for their consideration, reported the press-centre of SNORAS.  

Following the period of temporary administration, on 7 December 2011, the Vilnius Regional Court ordered that bankruptcy proceedings be initiated in respect of Akcine Bendrove Bankas Snoras (in bankruptcy) and ordered that Neil Cooper be appointed as the bankruptcy administrator of SNORAS.

Commenting on the significance of the SNORAS bankruptcy case, Neil Cooper said:
“The failure of SNORAS was the largest insolvency event ever seen in Lithuania and it has had a significant impact on many of its customers and counterparties in Lithuania and internationally. As well as being a significant Lithuanian bank, the major assets and liabilities of Snoras were international making the bankruptcy a complex multi-jurisdictional matter.”

Since his appointment as Bankruptcy Administrator, Neil Cooper and his advisory team have worked hard to protect and recover the assets of SNORAS so that these assets can ultimately be realised for the benefit of the creditors.

Some of the principal achievements throughout the bankruptcy include:

Notices sent to approximately 135,000 potential creditors of Snoras, inviting them to submit details of their claims.

Approximately 28,500 creditor claim forms processed by 180 bank staff supervised by the Bankruptcy Administrator’s team with the vast majority of claims now agreed and employee claims paid.

Approximately 24,500 creditors were notified of the initial creditors meeting, following which the meeting was successfully convened and an effective committee formed.

LTL 1.22 billion cash income to the bankruptcy estate from 7 December 2011 to 30 September 2012.

LTL 740 million of loan servicing payments collected as of 31 October 2012 as a result of active management of the loan portfolio.

Steps taken to recover funds and assets including a World Wide Freezing order to support a claim made in the English high court against the former shareholders for at least EUR 492 million (approximately LTL 1.7 billion) and recognition of the bankruptcy of Snoras in overseas jurisdictions to support asset recovery litigation.

Sale of 214 mini banks to Lietuvos Pastas for approximately LTL 3.1 million, the best offer available to creditors.

Significant cost saving measures implemented to maximise recoveries to creditors.

Such activities have resulted in significant value being returned to the bankruptcy estate but there are numerous ongoing activities aimed at recovering the assets transferred from SNORAS and Neil Cooper comments:

“The unravelling of the multi-jurisdictional and layered financial structures via which a large proportion of Snoras Bank’s assets were transferred away has been a highly complex exercise. We continue to seek the recovery of those assets, the loss of which appears to have been the major cause of the failure of Snoras Bank and led to significant financial harm to its creditors.”

Commenting on the future of the bankruptcy process, Neil Cooper adds:
“Despite this being a highly complex bankruptcy, we have achieved a lot so far and our hard work continues to allow us to recover maximum value from the bank’s assets. We will be working with the Creditors’ Committee to achieve these aims and will continue to focus on realising the value of the loan portfolio and the bank’s principal subsidiaries for the benefit of creditors.”