Банкеръ Weekly



The three-year torturing saga, created by the syndics of the insolvent Capitalbank and Standart News - former publisher of Standart daily, finally came to an end. In the end of November, the supreme legal instance in Bulgaria - a five-member council of the Supreme Cassation Court (SCC), confirmed the decision taken by the three-member council of the same court and the Sofia Court of Appeal. Thus it definitely rejected Capitalbank's claim towards the newspaper for an amount exceeding USD1MN. The announcement of the final decision means that Angel Parvanov, major shareholder in the bankrupt institution, has failed to gain some money in the complicated cunning with his former partner Krassimir Stoichev. In 1992, Stoichev established Standart daily with some financial support from Capitalbank. Later, the owner of the famous Tron company sold the daily to Michael Chernoy before the latter was declared persona non grata in Bulgaria. Eventually, the financing of Standart will appear to be an extremely expensive lesson on the basics of the publishing business. In September 1995, Capitalbank and Standart News signed an agreement according to which Parvanov launched a USD990,000 credit to Stoichev. The two businessmen prepared a plan for its redemption which included 17 installments ending June 30, 2000. The collateral on the loan was provided by a third party - News Holding and Tron. The agreement stipulates that Parvanov is allowed to ask his money back before the expiration of the established deadline, if Stoichev reduces the collateral or delays any of the 17 payments.In fact, no money has ever been transferred. Those USD990,000 were not the first credit launched by the bank to the owner of the newspaper (still Stoichev at that time). That's why the launch of this money was arranged as restructuring of existing liabilities (accumulated on two other credits launched in 1994).In 1996, Parvanov profited by the fact that Stoichev failed to make a payment and obtained an execution list for USD1,089,149 (including principal and interests). However, the former director of the bank failed to take back even one dollar of this amount. Then came the legal claim. In 1999, the syndic of the already bankrupt bank presented its claims against Standart News to the Sofia City Court (the newspaper had already been sold to Michael Chernoy). Initially, the court decided that the company that used to publish the newspaper was the one to owe the money and should be declared insolvent. The court decided that the amount, interests included, should be paid off to the creditor. After the first decision, however, Standart News appealed against it in the Sofia Court of Appeal. The second instance changed the course of the case and released Stoichev's former company from responsibility.In 2001, the saga entered the Supreme Cassation Court. A 3-member council of the court confirmed the decision of the court of appeal. The explanation of the cassation judges is that the credit has not actually been launched to Standart News. The three judges did not accept as evidence the fact that after signing the agreement the bank has renovated the earlier liabilities of the newspaper. The only interpretation of the agreement is that it acknowledges the existing debt and reschedules the payment in accordance with the redemption term, the judges explained. The new redemption terms approved later do not allow for renovation, because the term cannot be renovated as it represents only a part of the old debt. The main reason for the judges' decision that Stoichev's debts have not been renovated by the respective documents is the lack of Stoichev's written consent. The claimant failed to present in court the old agreements for the credits launched in 1994, as well as the written request of Mr. Stoichev for a new loan in 1995. According to the law, this request should have been accompanied by the respective explanations. In 2001, the case went up to the highest possible place in the judicial system - a five-member council of the Supreme Cassation Court. The claimant profited by his legal right to present additional evidence and ask for cancelation of the sentence. Parvanov submitted four new documents. A few days ago, however, the five members of the court refused to cancel the decision of their colleagues. They explained that the new evidence was not of great significance for the case, because it has been prepared after the agreement was signed in 1995 and contains no information for the reasons for this agreement and for payments made on its basis. Following three years of torture and different interpretations of regulations dated back to 1994, it's now obvious that the bankrupt institution and its former director Parvanov will receive no money from Standart - neither the principal amounting to USD990,000, nor the interests totaling USD1.300MN so far. The case is the second since March shock for the bankrupt bank and its former major shareholder Parvanov. Then, three members of the Supreme Administrative Court confirmed a decision taken by BNB in 1997 to declare Capitalbank insolvent. It was questioned by Parvanov's First Financial company, which is one of the three major shareholders in the bank. However, after a series of appeals Capitalbank had its licence definitely suspended.

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