In its last interpretative resolution (Interpretative resolution No 1/2019 court case No 1/2019) the Supreme Court of Cassation (“SCC”) ruled out that the insolvent bank is not a party to the court case for the establishment of the invalidity of the set-offs declared by its creditors or the bank itself.
The SCC based its conclusion on the following arguments:
- The bank insolvency procedure is laid down in the Bank Insolvency Act (“BIA”) and its specific rules differ from the general rules of the Commerce Act regulating the insolvency of companies.
- One of the main purposes of this procedure is to provide fast and equitable settlement of the claims of all depositors and other creditors of the insolvent bank.
- The specific aim of the procedure defines its main principles – protection of the interests of all depositors and creditors of the bank, as well as safeguard of the stability and the trust in the bank system.
The SCC indicates the specific rules establishing these three pillars of the bank insolvency procedure, namely:
- The managing bodies of the insolvent bank are not entitled to appeal the resolution opening the insolvency procedure.
- There are no rules establishing the procedure for adoption of a recovery plan. Thus, there is no possibility for the insolvent bank to continue operating as a separate legal entity once the insolvency procedure is closed.
- The BIA lists all persons entitled to claims and objections to the inclusion of the receivables of other creditors of the insolvent bank.
- Once the insolvency procedure is opened the managing bodies of the bank are divested of their powers and they are no longer competent to manage, transfer and dispose of the property included in the insolvency estate.
- The managing bodies of the bank are fully deprived of their managing and representative powers unlike the managing bodies of other insolvent traders.
- All their powers are conferred to the syndic and he shall be the only one entitled to represent the bank in the avoidance actions proceedings.
- The syndic cannot represent the parties on both sides of a particular court case at the same time. Therefore, the bank cannot be a party to the court proceedings for the invalidity of the set-offs declared by any of its creditors or the bank itself. The only respondent to such claim is the creditor whose receivable was set off.
The SCC points out that the trustee is the body who represents the insolvency estate. He is responsible for debt collection and settlement of the creditors’ interests. On the bases of the pillars listed above the SCC concludes that pursuant to the BIA the insolvent bank is in fact an insolvency estate managed by the syndic. Therefore, there is no possibility for a dispute between the insolvent bank and the syndic to arise. And the avoidance actions proceedings are such disputes.
The BIA establishes rules for the remuneration for the representative in absentia of the defendant in all procedures related to the insolvency of the bank. However, this may not be interpreted as an argument in favour of the opinion that the insolvent bank may be a respondent to the proceedings discussed above.