Sofia City Court appointed two interim bankruptcy receivers at the Corporate Commercial Bank (CCB) on March 25, only hours after the Bulgarian state fund for deposit guarantees lodged a formal request with the court.
The lender has been under the special supervision of the Bulgarian National Bank (BNB) since June 20 2014, when administrators appointed by the central bank took over the management from CCB’s board of directors. CCB was Bulgaria’s fourth-largest lender by assets at the point it was put into conservatorship, but lost its licence in November 2014 following an audit report that recommended writing down about 4.2 billion leva of impaired assets.
Media reports in recent weeks have claimed that CCB’s assets continued to decline under the stewardship of BNB-appointed administrators, which prompted Prime Minister Boiko Borissov to ask Parliament to amend the bank insolvency law to allow the appointment of interim receivers as soon as a lender loses its licence.
(In CCB’s case, bankruptcy proceedings were suspended for the duration of an appeal lodged by shareholders against the loss of the bank’s licence at the Supreme Administrative Court, which is yet to issue a final ruling on the issue. Although a three-judge panel has already ruled against the shareholders, that decision is now being appealed in front of a five-judge panel.)
Parliament passed the amendments last week by an overwhelming majority and the bill was published in the State Gazette on March 24.
The deposit guarantee fund nominated Lazar Iliev and Rossen Angelchev as interim receivers – under the amendments passed by Parliament, Sofia City Court was required to make the appointment as long as the nominees met the legal pre-requisites for the position. The deposit guarantee fund is CCB’s largest creditor, having started payout of guaranteed deposits in December 2014.
Iliev has a master’s degree in law and has had an extensive career in the banking sector, having served as head of the legal departments at First Investment Bank and Central Cooperative Bank, then executive director and board member at Central Cooperative Bank. He spent the last four years at the National Audit Office as head of the administrative department and then its secretary-general.
Angelchev spent the last decade in various positions at the Economy Ministry, but before that served in legal adviser capacity at several Bulgarian companies undergoing bankruptcy proceedings, including former flag carrier Balkan in 2002/04 and, before that, at two Bulgarian lenders that went bankrupt following Bulgaria’s banking crisis in 1997.
(For full coverage of the CCB situation from The Sofia Globe, click here. Logo and corporate motto of Corporate Commercial Bank – “our clients are dear to us” – from a CCB advert. Screengrab from corpbank.b)