2013-04-18
The Bank of Lithuania will apply to court on initiation of bankruptcy proceedings against Ūkio bankas
After assessing the interim report on the financial standing of Ūkio bankas presented by its Temporary Administrator, according to which the Bank’s assets are less than its liabilities, the Board of the Bank of Lithuania decided to apply to court on initiation of bankruptcy proceedings against this credit institution. UAB Valnetas will be proposed as the bankruptcy administrator.
Taking into account the finding presented by the temporary administrator of Ūkio bankas, that the liabilities of Ūkio bankas are less than its assets and that there are no real possibilities to restore stability and credibility in its operations, the Board of the Bank of Lithuania recognised the Bank as insolvent on 18 February 2013 and took a decision to permanently revoke the banking licence issued to this Bank.
On 23 February 2013, AB Šiaulių bankas, Ūkio bankas and the state enterprise Indėlių ir investicijų draudimas entered into an agreement on the transfer of assets and liabilities, and on 3 March 2013 the parties to the agreement signed the deed of transfer of the assets, rights, transactions and obligations under this agreement.
The temporary administrator of Ūkio bankas submitted to the Bank of Lithuania the interim report on the Bank’s financial standing as of 18 March 2013, prepared jointly with the audit firm KPMG Baltics. According to the report, the net value of the assets of Ūkio bankas, after the transfer of its assets and liabilities, is LTL 356.300 million, liabilities—LTL 1,583.14 million, i.e. the net value of the assets is by LTL 1,226.82 million less than its liabilities and, therefore, the Bank was and remains insolvent.
In view of the above, as well as of the circumstance that the major tasks set for the Temporary Administrator, Adomas Audickas, during the moratorium have been implemented, the Board of the Bank of Lithuania decided to apply to the Kaunas District Court with the request to initiate bankruptcy proceedings against Ūkio bankas.
Under the Republic of Lithuania Enterprise Bankruptcy Law, the Bank of Lithuania, filing with the court a petition on initiation of enterprise bankruptcy proceedings, shall propose to the court a candidate for bankruptcy administrator.
The Board of the Bank of Lithuania approved the bankruptcy administrator’s candidature presented by the Supervision Service of the Bank of Lithuania, thus UAB Valnetas will be proposed to the court as administrator of Ūkio bankas. This candidature for bankruptcy administrator was chosen given its experience in bankruptcy administration, its reputation, possibilities to carry out complicated, large- scope bankruptcy proceedings, and services pricing proposals.
UAB Valnetas is one of the most experienced companies in bankruptcy administration in Lithuania. The company pointed out that for Ūkio bankas bankruptcy administration it has invoked a team of lawyers (TARK GRUNTE SUTKIENE and AAA Baltic Service Company), auditors (BDO Auditas ir apskaita, UAB), and asset valuators (NEWSEC/Re&Solution).
Once the court takes the ruling on initiation of bankruptcy proceedings against AB Ūkio bankas, the mandate of the temporary administrator and its team will terminate, and AB Ūkio bankas will further be administered by the administrator appointed by the court.
It is expected that, once the court approves the proposed candidature, the bankruptcy administrator and its team will properly ensure continuity of the works commenced and of the trilateral agreement among AB Ūkio bankas, AB Šiaulių bankas and the state enterprise Indėlių ir investicijų draudimas.