Bulgarian Court Appoints Two Temporary Assignees at Failed KTB

Business » FINANCE | March 25, 2015, Wednesday // 17:16
Bulgaria: Bulgarian Court Appoints Two Temporary Assignees at Failed KTB KTB headquarters building in Sofia. Photo by BGNES

The Sofia City Court has approved the nomination of two temporary assignees who will manage the assets of collapsed Corporate Commercial Bank, or KTB, and run it on a daily basis.

Lazar Iliev and Rosen Angelchev will assume their new function within two days, BNR radio station reported on Wednesday.

They will replace the two conservators appointed by Bulgaria’s central bank, BNB, in June 2014. The BNB seized control of KTB in June following a run on deposits.

Iliev and Angelchev had been nominated by the Bulgarian Deposit Insurance Fund (DIF), which is in charge of repaying state-guaranteed deposits of up to BGN 196,000 in KTB.

According to the DIF website, the Fund has repaid a total of BGN 3.544 B (EUR 1.77 B) to 104,200 depositors of KTB since the initial day of reimbursement, 4 December 2014, until the close of day on 24 March 2015.

The appointment of Iliev and Angelchev as temporary assignees became possible after Parliament changed the Bank Insolvency Act last week.

The changes were proposed by Prime Minister Boyko Borisov and Finance Minister Vladislav Goranov to prevent what they called ‘looting’ of KTB. The change in legislation aims to protect KTB’s creditors and recover the failed bank's assets.

The BNB cancelled the banking licence of KTB and opened insolvency proceedings against Bulgaria’s fourth-largest lender last year.

The insolvency case, however, has been stalled at Sofia City Court by an appeal against the revoking of the licence filed by the bank’s majority owner Bromak EOOD, a company owned by Bulgarian businessman Tsvetan Vasilev.

The two temporary assignees have the legal powers to seek suspension or cancellation of deals involving KTB’s assets until the insolvency case resumes. Iliev and Angelchev can halt such deals or declare them null and void in case they consider the transactions harm the interests of the state and the DIF in particular.

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Tags: Bulgaria, BNB, KTB, assignees, conservators, Bromak, Tsvetan Vasilev, Deposit Insurance Fund, DIF, Bank Insolvency Act, Lazar Iliev, Rosen Angelchev
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