SHIP PURCHASE CREDITS TURN OUT TO BE THE CURSE OF SG EXPRESSBANK
New management of SG Expressbank is not a lucky one. Hardly, upon buying the Varna bank in September 1999, the French Societe Generale representatives thought it will create so much problems for them. It seems that almost each credit for financing the purchase or renting of ship is problematic. For some of these credits the bank will have to prove its position at court. The new case will be presented to the Sofia District Court on November 28. The Credit Bank curators attack the Varna institution as it has not transferred to them USD1.13MN, which were ordered by Bulgarian Marine.
On March 15, 1999, a month and a half after Credit Bank (CB) went bankrupt, Bulgarian Marine ordered Expressbank to debit its account with the amount of USD1.13MN and transfer it in favour of the failed banking institution, owned by Multigroup. Thus Bulgarian Marine hoped to cover its debt to CB. Instead of effecting the ordered transfer, the managers of Expressbank decided to block their customer's funds and informed CB curators that this covered to a major extent their receivables from the bankrupt credit institution, owned by Ilia Pavlov. Are the actions of Expressbank management legal will be clarified at court. According to the curators, through this transaction Expressbank has actually jumped the queue of other creditors.
Now the curators plead at court newly established SG Expressbank to remit the amount. If that happens Bulgarian Marine will not be among the debtors of the bankrupt financial institution of Multigroup, and the Varna based bank will have to wait for its legal turn (together with other banks creditors) to collect at least a part of its receivables. As it is easily assumable at the bottom of the conflict between the two financial institutions is a ship purchasing credit. As a rule, recent operations related to it are quite complicated.