BPP: Mendes Paulo assumes role for “professional brio”

O president of the liquidating commission of Banco Privado Português (BPP), Manuel Mendes Paulo, told Lusa that he accepted the role of judicial liquidator for “professional brio” to finish the work done in recent years.

In July, the Court of Commerce decided that the BPP Settlement Commission will be dissolved and replaced by a single Judicial Liquidator, a place that will be assumed by Manuel Mendes Paulo.

Although the court has decided that the transition would take place from 1 September, it has not yet happened because the legal registration of the liquidator (which depends on conservatory marking) is missing.

In an interview with Lusa, Manuel Mendes Paulo showed discomfort with the decision of the court, which had a favorable opinion from Banco de Portugal, and stated that he accepted this function because he considers that it should end the liquidation of the BPP and because it is important to preserve the memory (knowledge of the processes, documents, in recent years).

“ Attention, there is no one irreplaceable, but there is a minimum of professional brio in which the person says 'we stay to finish'," Lusa said, saying that she is already 77 years old for what she does not do for a professional career.

Still, he admitted that he “liked it to have been otherwise”.

About the 21 workers of the liquidator commission, Mendes Paulo said that moving to a liquidator does not mean that he is alone in managing the settlement and that there will continue to be services (case of legal advice) and that those whose functions are still required will remain.

Yet, in recent times, he added, there have already been redundancies of workers, which will continue to happen as tasks are completed.

This week, the liquidating commission of the BPP advanced with the first partial payment to ordinary creditors which may total up to EUR 80 million.

To Lusa, Mendes Paulo said that on Tuesday he gave orders to the services for payment to 200 common creditors, totaling about four million euros, and that later this week a new payment order would be given to another 200 creditors, totaling seven million euros.

About 4,000 common creditors (persons and entities/enterprises) will be paid 8.4% of the total recognised credits as soon as the documentation is validated.

For the moment, more than 2,000 creditors have the complete processes or are to be completed by what is already happening or will happen in the coming weeks. The remaining shall be paid as the documentation is received and validated by the liquidator commission.

BPP’s common creditors have a total of EUR 944 million. However, the amount to be received will be much lower since the assets of the BPP are not sufficient (the ‘hole’ of the BPP was close to EUR 1,000 million) and there are creditors who pass ahead (guarantees and privileged).

In fact, ordinary creditors are now being paid because the EUR 450 million on guaranteed credit has already been fully returned to the Portuguese State.

About the fact that there will be a new payment to ordinary creditors, Mendes Paulo said that there are more values to be recovered and distributed and that one of the factors that most depends on the values to be distributed has to do with the “behaviour of the Tax Authority”, because there is a divergence with the tax on a subsidiary entity of the BPP (Improprivate) and which involves about 40 million euros.

The collapse of BPP, a bank dedicated to fortune management, began with the financial crisis of 2008 and culminated in 2010.

Despite the small size of the bank, the bankruptcy of BPP injured thousands of customers and the State, and still had significant repercussions due to potential effects of contagion to the rest of the system when there was a financial crisis.

The liquidation process was then initiated, which lasts for 16 years and still takes place.

About the liquidation, Mendes Paulo estimated that it lasts two to three years but depends mainly on the ongoing judicial proceedings.