Spanish shareholders who suffered losses due to the resolution of Banco Popular will not be able to claim compensation from Banco Santander (who bought Banco Popular), the Court of Justice of the European Union (CJEU) ruled on Thursday.
These shareholders contracted in May 2016 the €2.5 billion capital increase of Banco Popular, based on allegedly defective information in the prospectus of the issue. On 6 June 2017 Banco Popular was intervened by the SRB (Single Resolution Board) after suffering a liquidity crisis and being deemed unviable. It was sold to Banco Santander for the symbolic price of one euro.
Now, the Court of Justice of the European Union has ruled that these shareholders cannot bring an action against Banco Santander for liability for the information contained in that prospectus or an action for nullity of the subscription contract for those shares. The judges recall that European law includes a safeguard which allows that if the shareholders and creditors affected by a resolution suffered MORE LOSSES with this operation than they would have suffered in an ordinary liquidation, they can claim the return of the difference before the courts, but that this would not be the case. The CJEU thus aligns itself with the criterion of the Advocate General of the European Union of last December. Read more.
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