1. Housing Crisis

After the housing bubble, Banco Popular had 25.000 million promotor credits on it’s balance sheet, the recovery of which was completely inviable.

2. Emission and sale of complex products among small investors.

In the same way that other banks have done during recent years, Banco Popular emitted and sold complex financial products such as bonds that were mandatorily convertible in stocks, bonds that were contingently convertible in stocks (CoCoS) and subordinated debt to small investors for over 2.000 million euros in an urgent bid to recapitalize.

3. Purchase of Banco Pastor on the 7th of October 2011 for almost 1.246 million euros.

At the time of purchase, the directors of the bank assured that they were paying less than the accounting value, but the truth is that Banco Pastor had a negative net value of 497.1 million euros and increased evermore Banco Popular’s exposure to problematic property assets.

4. Capital increases

Since 2008 Banco Popular made multiple capital increases, moving from 121.427 stockholders in 2007 to 305.000 stockholders in June 2017. Among the multiple capital increases, two of them stand out due to their size: i. End of 2012 increase. Banco Popular didn’t pass the resistence tests for that year. According to the tests, it needed 3.223 million euros more. To avoid public aids, the bank decided to increase capital by 2.500 million euros, with which it supposedly assured it’s future and fulfilled the legal requirements. ii. May 2016 capital increase. In mid 2016, Mr. Ángel Ron, the then president of the bank, announced a new capital increase, this time with the “fundamental objective of strengthening the balance sheet and improving both it’s profitability indexes along with it’s levels of solvency and the quality of it’s assets”. At that moment, Ron assured people the entity was financially healthy and that the capital increase would improve it’s maneuverability looking ahead to future regulation changes and potential uncertainties that could significantly alter the accounting estimates.

5. Departure of Mr. Ángel Ron and arrival of Mr. Emilio Saracho

6. The beginning of the end

In February 2017, after 32 years at Banco Popular, Mr. Ángel Ron is removed as president of the bank. The bank registered 3.485 million euros worth of losses. Mr. Emilio Saracho is named as the new president. Despite the efforts to maintain an appearence of control and normality, with the arrival of Saracho to the presidency the depth and gravity of the financial situation of Banco Popular started to become clear. On the 3rd of April 2017, the entity acknowledges that “the bank will include the required corrections in a retroactive form in the first semester’s financial estates”.

Stockholders and owners of convertible bonds and debt only have one way to recover their money: In court claim. Even though the resoluction scheme adopted by the JUR established that stockholders and creditors should be the first collectives to support losses, there are different ways to claim depending on the circumstances in each case:

• Lack of consent through error in the financial information published by the bank at the time of adquisition of the stocks.
• Lack of consent through error in the characteristics of the adquired product.
• Responsibility for the content of the leaflet (LMV).
• Compensation for damages caused by contractual breaches.
• Responsibility against the administrators
• Penal actions
• Claims against the administration

If you’re a Banco Popular stockholder, the chance to claim with guarantees depends on the moment of purchase of the stocks.

• If you bought stocks in the capital increase of 2016: You can claim.

The information provided by the bank in order to go ahead with the capital increase in 2016 was incorrect. Additionally, many of these clients took out a loan with bank in order to purchase these stocks. Take into account the fact that we’re in a similar situation to when Bankia exited the stock market, the accounts they used were fraudulent. In this case they were incorrect. In both cases the stockholder has taken into consideration an unreal financial situation, leading them to a decision that they wouldn’t have made had they known the real situation.

• If you bought stock before the 2016 capital increase, now is not the time to start any civil actions.

You could file a criminal lawsuit o even present a social responsibility claim against the administrators. However, we don’t advise individual action in this case given the high cost and lack of economic returns you’ll obtain.

• If you bought stocks after the capital increase but also after the 3rd of April 2017: The chances of success are lower although we still consider the claim viable.

Although the possibility of presenting a criminal lawsuit exists, if you subscribed stocks in the capital increase of 2016, we recommend you file a civil suit, given that it’s the quickest and most effective way to recover your investment.

If, on the contrary, you bought stocks in an earlier or later moment, we can consider the possibility of starting penal or administrative actions.

Our recomendation is to claim individually. The courts can even refuse to process collective claims.

For now, as long as Banco Santander doesn’t define the juridical integration figure after the purchase of Banco Popular, the claim is against the seller of the product, Banco Popular

If the nullity claim prospers, the invested amounts are recovered with the corresponding legal interest.

In the case that the concept accepted is compensation for damages, the judge could modulate the amount recovered according to factors they judge have influenced the loss of value of the stocks.

Until now Banco Santander hasn’t shown any signs of offering a proposal or solution to the thousands of affected investors. The situation is even more alarming for those who contracted loans for the purchase of stocks. Santander has offered refinancing with much worse interest rates for their clients.

Yes, you can claim. In this case we’d present a judicial claim requesting the return of the difference between the invested amounts and the amount received in the sale of the stocks.

At this moment the most restrictive time limit would be June 2019. That is when three years would be up since the claimant could have had knowledge of the false nature of the leaflet used for the 2016 capital increase.

According to the Judicial Statistics Service, a procedure like this can take on average 9 months in first instance, and, if appealed, around 6 months more.

The claim is presented in the First Instance court corresponding to the claimants address.

The chances of success are high, considering that the Banco Popular itself acknowledged in April 2017 that there were discrepancies with the accounts published in May 2016 for the capital increase.

Once again, there is a similarity with what ocurred with Bankia. In that case, the courts eventually sided with the investors.

Predictably, Banco Popular will defend itself alleging that:

(i) The stockholders knew the risk that an investment in stocks involved.

(ii) The bank fulfilled all the formalities required at the time of the emission

(iii) At the time of the capital increase the accounts reflected the true state of the entity.

Worse case is that the lawsuit is rejected and the client is forced to pay the opposing party’s legal costs.

Once a trial is won, we have to wait twenty working days for the sentence to be confirmed. During that time, the bank can appeal. If they don’t, they have a month to voluntarily deposit the money. Once that is done, we must still wait to get the money from the court via an payment order, which can take another month. Up until now, three months approximately will have passed.

If the bank doesn’t voluntarily pay, we’ll present an enforcement order against them, which would stretch the process out three or four months more.

It depends on if you’ve deduced taxes or not in previously years. We advice you consult each case with a fiscal advisor. At RD Asesores we have fiscal experts prepared to give you all the advice you may need.

SYes. There is a multitude of sentences that side with the heirs in these types of procedures (as long as it’s proven they’re the rightful heir).

If both parties are co-owners of the stocks, the claim must be presented in name of both parties.

Because we win.

Because we know how to recover your money, our results back that up.
Because you’ll receive a personalized treatment, you won’t be one of thousands of clients.

Because your claim will be presented in two weeks and you won’t wait months.

Because our tariffs are very competitive, we only get paid if you do.

And because we offer all of this with a high degree of quality and professionalism.

• Professional order sheet
•  Power of Attorney
  
•  Questionnaire.
•  Purchase order
•  Purchase liquidation extract
  

Also it would be convenient to add:

•  Deposit and administration contract
•  Summary of the information leaflet
  
•  Information triptych
  
•   Summary of historical operations.
  

• Without provision of funds, we only charge if the claim is succesful and at the end of the work.
• In the case that you recover your money, 10% of the amount recovered + IVA. If the amount claimed is under 2.000€, 20% of the amount recovered + IVA.
• In the case that the bank is convicted to pay legal costs, all of the legal costs + 10% + IVA of the amount recovered.

It’s an amount of money that’s quantified by the court, depending on the claim amount, to cover the costs of the lawyer and the solicitor that the winner has had to pay.

The conviction in legal costs is when the judge sides completely with the winning party of the trial

It’s unlikely for this to happen. It would be the worse case scenario.

• Lawyer services:
  • Complete processing of the claim, in or out of court, in all instances up until the Supreme Court, including enforcement costs.
  • Telephone and email attention, along with in person service to prepare the trial if necessary.
• Solicitor services:
  • Complete processing in all instances.

Power of attorney

– It’s a document that’s signed in front of a notary and that empowers the lawyer and solicitor that will represent you in court.

– This document can be signed in any notary office in Spain and tends to be handed to you in the moment and without appointment. It has an approximate cost of 50 €.

– We have a model at your disposal that you can take to your notary or we can indicate to you the various notaries RD Asesores work with.

Rates

Only companies are obliged to pay court rates. The amount is calculated over a fixed 300 € for amount over 6.000 € and 150 € for claims under 6.000 €, in both cases, plus 0,5% of the amount claimed, as long as your claim is over 2.000 €.

Additional Costs

• The costs of getting to the location where the services are contracted, telephone calls and photocopies are included.
• What isn’t included is the mandatory deposit (between 25 € and 50 €) and the delivery of certified post, messengers and burofax, which the client will have to pay.
• Before incurring in any extraordinary cost in the processing of the case, the client will be consulted and will have to agree to the cost.